How Buyers Can Win With an Escalation Clause

By Jenny Mateyoke

As your professional real estate advisor, I focus on client satisfaction. My business is about service and I am not happy until you are happy. My years in the business have provided me the experience to assist you with nearly every real estate need.

We’re in the midst of a strong seller’s market, which means things are incredibly competitive among buyers. As a result, you have two different options if you want to purchase a home: You can offer a high price at the start, or you can add an escalation clause to your offer.

A lot of buyers are taking the escalation clause route because it provides quite a bit of flexibility while still being effective. It’s essentially a provision that raises the buyer’s offer above other offers that are submitted. The escalation clause includes the original list price, the amount the offer will increase, and the maximum price the buyer will pay.

For example, let’s say you want to buy a home that’s priced at $250,000. You could offer this amount and include an escalation clause saying you’ll go $1,000 above other offers until the price hits a maximum of $260,000. If an offer comes in at $251,000, your offer will change to $252,000. This could go back and forth until you’re offering $260,000; if they then offer $261,000, your offer won’t escalate.

There are some other ways to make your offer stand out as well. You could make a cash offer, offer a larger earnest money deposit, provide a larger down payment, waive contingencies, or be flexible with closing dates. 

If you have any questions or would like more information about buying or selling, feel free to reach out to me. I look forward to hearing from you soon.