Escalation Clause

Escalation Clauses are used in contract whereby there may be a shortage of homes for sale and you receive multiple Offers, each competing with one another. The clause would define how much a Buyer is willing to pay over the highest competing net Offer. Often times it will also contain a maximum amount the Buyer is willing to go up when including an Escalation Clause. 


Just a word of advice . . going with the highest Offer doesn't mean the home will appraise to that Offer and you may have to reduce the sales price later if the appraisal comes in much lower than the sales price that was a result of competing Offers with Escalation Clauses. Yo may be better off to accept an Offer a little lower if the Buyer is stronger or the terms are better suited to your needs.