What is an escalation clause?
What is an escalation clause?
Have you heard of an escalation clause? When submitting your offer, you most likely will have one included in your offer, and it’s important you understand what it is and how it works.
An escalation clause is used to address situations where there may be competing offers for a property. The clause allows a buyer to automatically increase their offer in response to a higher competing bid, up to a specified limit.
Here's how it typically works:
A buyer includes an escalation clause in their offer to purchase a property.
The clause specifies the amount by which the buyer is willing to increase their offer above any competing offers.
If another buyer submits a higher offer, the escalation clause automatically increases the original buyer's offer by the specified increment, up to a maximum amount set in the clause.
The buyer with the escalation clause benefits by having their offer automatically adjusted to stay competitive without having to continually revise and resubmit offers.
Escalation clauses are great tools to help you win the home you love! Send me a message if you have more questions or are ready to start your new home search today! (Or even if you’re not ready until another 6 months…)
