How Does An Escalation Clause Work?
Many times, especially in the market we have been experiencing for the past several years, sellers will receive multiple offers. In these types of markets an escalation clause might be used and necessary for you to obtain the home you want. An escalation clause would allow a buyer to raise their offer for a home if the seller received a higher offer.
Typically, the escalation clause will be very specific on what the buyer is willing to pay as their highest offer. It is a way for the buyer to show very serious interest in obtaining the home.
While an escalation clause is a fairly simple concept it is best to use a trusted real estate professional to assist you through this process. In some cases, you may want to utilize the services of a real estate attorney as well.
A word of caution though is to be careful on how high you go with your escalation clause especially if you are obtaining a mortgage and tighter on funds.