Multiple Escalation Clauses Push Buyer Competition

Dated: 05/13/2014

Views: 535

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.

Blog author image

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

2018 Boise Spring Parade Of Homes Preview

Here's a quick peek at this year's 40 participating homes. From entry-level homes to high-end luxury properties, there is something for everyone! So whether you are looking to build your own home

Read More

2018 Spring Parade Of Home Info

2018 Boise Spring Parade of Homes is here!  What: Local builders showoff the latest in design and new construction technology.  Enjoy over a dozen gorgeous homes ready for your

Read More

CPR Credit Repair Idaho Shar Helton Chatting Credit Repair

CPR Credit Repair Idaho - Shar Helton Chatting Credit Repair!Hey guys!  Here we discuss another great and very important topic, Credit Repair. Shar Helton, Credit Expert with CPR- Credit

Read More

Great Meridian Location Close To Everything 1387 White Sands Meridian MLS 9868864

Great Meridian location close to everything!1387 White Sands, Meridian – MLS #9868864Great Meridian location close to shopping, schools, and the outdoors. This home has brand new carpet (w

Read More