Do Escalation Clauses Work? Tips, Tricks and Expert Advice

Todd and Oana talk about whether escalation clauses work or not. An escalation clause is an element of an offer where the buyer puts a stipulation in that they will beat any other offer by a set amount, up to a limit. An example of an escalation clause is a home that’s listed for $375,000 and offering to beat any other offers by $1,000 up to a max purchase price of $400,000.

In some states offers that have these escalation clauses are not considered valid offers. There is also a dispute as to what to do as a seller when you accept an offer with an escalation clause and then the buyer demands to see the other offer that they beat by their incremental amount. Additionally, what happens when you have multiple buyers that all have their own escalation clauses that compete with each other.

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