Escalation Clause, Should You Include one in Your Purchase Contract?
Escalation Clause, Should You Include one in Your Purchase Contract? Purchase Contract Brenda Wynn Las Vegas NV Real Estate Berkshire Hathaway HomeServices In a seller’s market, several buyers may make offers on the same property. If you’re trying to buy a home under those circumstances, you may worry that another buyer will make a bid that’s higher than yours and that you’ll miss out on your dream house. An escalation clause may be helpful, but it’s not right for all buyers and situations. What Is an Escalation Clause? An escalation clause, or an escalator, is a section in a purchase contract that states that the buyer is willing to offer a higher amount if the seller receives a better offer from another buyer. For example, if you make an initial bid of $250,000, you can include an escalation clause stating that you’re willing to raise your offer by $5,000 if the seller gets a higher bid from another buyer. The clause will state the maximum amount you’re willing to pay. An escal...