Escalation Clause The Key To Staying Competitive

Dated: February 4 2019

Views: 161


In our competitive market, what can you do to give your client a competitive edge over other buyers? Here are a few tips to try.

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If you ever find yourself in a bidding war for a home your client loves, we have some strategies you can use to make your offer stand out to the seller over your competition.

In our current market, we still have a low amount of inventory. Especially if the home is at or below the $300,000 price mark, you can expect competition from at least two or three other buyers, if not more.

An escalation clause gives your clients a competitive edge in these multiple offer situations. The form directs you to increase your client’s offer by a certain increment up to a maximum amount to beat a competitor’s offer. We will also set up a maximum purchase price, which will be specified on the form.


An escalation clause gives your clients a competitive edge in these multiple offer situations.


Once your buyer wins the contract, the contract is modified and the clause goes away. It is important to note that if you are put in a backup position because your original offer was not the winning offer, the price reverts back to the original purchase price offered, unless you receive a counter from the seller. 

Along with an escalation clause, I would recommend leaving out certain items in your offer, like the seller’s washer and dryer set or a dining room table that you love. You might also ask the client to shorten the inspection period or put more earnest money down to show the seller they’re more vested. Consult with them about what kinds of terms would be advantageous to include or exclude in your offer. 

If you have any other questions about escalation clauses or strategies to be competitive in a multiple offer situation, please reach out to us. It’s a complicated market and we’re here to guide you.

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Megan Womack

Megan Womack came to Front Door Realty with over 10 years of customer service experience. She thrives on making sure our clients come first, is the ultimate people person, and makes friends everywhere....

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