Multiple Escalation Clauses Push Buyer Competition

Dated: 05/13/2014

Views: 523

TUESDAY, MAY 13, 2014

With inventory low and multiple offers becoming more common, more real estate agents are employing escalation clauses to help their clients win bidding wars.
However, what once was considered a secret weapon in an agent's arsenal has become a more mainstream tool.  Escalation clauses automatically increase a buyer's offer by a set amount -- typically $1,000 -- over the highest competing offer. 
Coldwell Banker agent Sarah McCarthy in Lincoln Park, Ill., recommended that her clients use an escalation clause because there were seven other bidders but was surprised that three other bidders employed the same strategy.
More buyers are agreeing to escalation clauses because of the protections they offer, as they generally have an upper-limit cap and do not kick in unless there are other legitimate, confirmed offers.  Moreover, the buyer's lender will not provide financing if the contract price is not supported by an appraisal. 
"In this market that's going crazy, people just want to know that they're not jumping all in and being crazy," says Peter Kozak, an @properties agent in Chicago.
Source: "The Competition for That Home You Want Just Got Tougher," Chicago Real Estate Daily (05/08/14)
(c) Copyright 2014 Information Inc.

Phil Mount

Phil Mount is an agent at Front Street Brokers in Boise, Idaho. Phil became a licensed REALTOR in August 2009 after a 25 year career as a technology marketing professional. In his first year as an a....

Want to Advertise on this Site?

Latest Blog Posts

Great Single Level Home In A Convenient Boise Location 3968 S Oak Brook Way MLS 98674860

Great single level home in a convenient Boise location3968 S Oak Brook Way MLS 98674860Great single level home in a convenient Boise location.  Close to the Greenbelt, Bowne Crossing and all

Read More

Last Remaining Riverfront Lot In Eagles Most Desirable Subdivision 1123 Sherington Eagle MLS 986674

Last Remaining Riverfront Lot in Eagle’s Most Desirable Subdivision1123 Sherington Eagle -MLS 98667459You don’t want to miss the opportunity to build your dream home on the last remaining

Read More

Turn Key Kuna Home Ready For A New Owner

Turn Key Kuna Home Ready For A New Owner1878 W. Oakley Way Kuna ID 83634$214,900MLS: 98674193Contact: Jared Cozby (208) 830-3715Turn key home ready for a new owner! All new flooring - new

Read More

Completely Remodeled Classic Ranch On The Golf Course 4959 Umatilla Ave Boise 83709 MLS 98673494

Completely Remodeled Classic Ranch on the Golf Course.  4959 Umatilla Ave, Boise 83709, MLS 98673494Fall in love with this totally remodeled classic ranch home located on the 1st

Read More