View the Video version of this Episode at: https://www.jenniferobrienhomes.com/2022/05/03/what-is-an-escalation-clause/
What is an escalation clause and can it help you beat the competition in a multiple offer situation? Stay tuned and let me tell you all about it!
An Escalation Clause is one tool we can use to help you win in a multiple offer situation. This clause states that you, as a buyer, are willing to raise your offer on a home should the seller receive a higher competing offer. The clause will state how much more you are willing to pay than the highest offer and your spending limit. Essentially, escalation clauses offer you protection if other potential buyers outbid you.
For example, suppose you submit an offer of $500,000; you could include an escalation clause that precisely states the amount you are willing to offer above other buyers, up to the maximum you’re willing to spend. If there is a $505,000 offer submitted by another buyer, an escalation clause makes it conceivable to beat the competing offer by a preset amount, say $510,000.
An escalation clause is triggered when the seller has proof of a bona fide offer from another buyer. This means that the offer is legitimate and enforceable. Essentially, a seller cannot make up another offer.
Keep in mind, escalation clauses are not foolproof and may not make sense for your unique situation. Therefore, it’s wise for us to develop the best plan that meets your needs and gets you into your home!
If you want to learn more about what makes you stand out in a multiple offer situation, give me a call!
