🤔 Escalation Clauses.... How Do They Work?
Amanda gives us the ins and outs of escalations clauses and how they work. In this very unique and exciting real estate market we come across escalation clauses more than you might think. I have found the majority of agents and consumers don't really understand how they work. So here is how escalation clauses work in a nutshell. Let's say a buyer is going to offer a price of $300,000 for a home. Then we add an escalation clause to the offer as an addendum. So I will ask my buyer what is the top number you are willing to pay for this home, they choose $350,000. That number is their top escalation amount. So we will put in an escalating factor of $1,000. So our offer will increase by $1,000 until you reach $350,000. So to break it down, it means you are willing to over $300,000, up to $350,000 in increments of $1,000 automatically if someone summits an offer that is competitive. The listing agent does have to provide proof that another competitive offer is on the table. Sometimes it helps to pick an odd number, for example $351,000. Hopefully this helps explain escalation clauses! Always reach out to me if you have any question!!
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