What is an escalation clause in a competitive seller's market?

An escalation clause in a competitive seller’s market may be your secret to winning a bidding war. What Is An Escalation Clause In Real Estate? An escalation clause, or escalator, is a section in a real estate contract that states that a prospective buyer is willing to raise their offer on a home should the seller receive a higher competing offer.

What is an escalation clause in real estate?

An escalation clause is a real estate contract, sometimes called an escalator, that lets a home buyer say: “I will pay X price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer to Y price.” In theory, an escalation clause is fairly simple.

When does an escalation clause go into effect?

The escalation clause, sometimes known as an escalator, only goes into effect when the seller receives more than one offer. It may include the following parts: Initial offer: The purchase price you offer on the home. Proof of a bona fide offer: A request to see proof the seller has another purchase offer on the home.