Real Estate Offer With Escalation Clause In Wake
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Including an escalation clause may put you at risk for paying more than what the property was appraised for. Just because someone else is making a higher offer doesn't necessarily mean the home is worth that amount.
On the other hand, an escalation clause may not be necessary when you're not certain you want to buy the home, if multiple offers are unlikely or if you have other options on the table. If you need help deciding whether to use an escalation clause, consult your real estate agent or attorney.
The reason why sellers don't want escalation clauses is simple: It introduces the risk that they'll sell the house for less than what would be your best and final offer.
However, buyers need to be careful with these clauses as they can sometimes backfire. “An escalation clause needs to be in conjunction with a really good offer,” said Madani of Room Real Estate. “It's really the whole package to get your offer accepted.”
The reason why sellers don't want escalation clauses is simple: It introduces the risk that they'll sell the house for less than what would be your best and final offer.
