The Escalation Clause

Not every listing agent or seller is willing to work with an escalation clause, but when there is an opportunity, we are finding success with them.

Here is a real world example-

• My clients are looking to buy a home that is super dreamy but don’t want to over pay.
• The comparable sales from six months ago don’t hold up to the market we are in, the pace is too fast for comparable sales to really track with, so the Comparative Market Analysis we would usually use to find our price is less helpful.
• There is always the question of, ‘what % over list do we need to consider to be successful?’ That would be an easy answer if every home for sale held the same philosophy on pricing. If that was the case we could develop a metric like X% over/under listing price will do the job. The truth is, sellers and agents set the price of a home together and there are many ways to come to  a list price and every home on the market gets a varying amount of interest and therefor offers to compete with my clients offer.

An escalation clause can be a great tool in this situation. It simply says, this buyer will beat any competing offer and top it, for example, by $5000 up to $XXX,XXX.  In an effort to start the sale in good faith, you also stipulate that this buyer receive from the sellers agent a redacted page one of the competing offer.

There is a bit more to it, but that is the basic outline and, in this case, it worked and our clients are the happy owners of the super dreamy house!

If you’re looking for a buyers agent that utilizes all the tools in this competitive market, don’t hesitate to call!

Sean O'Feery

Broker | Earth Advantage | ADU Specialist | OR

Hello my name is Sean Patrick O'Feery,   I am thrilled to give you the attention to detail and service that you deserve from a skilled, motivated and intuitive Real Estate agent...

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• T: 206-795-0703
• F: 503-961-8224
• sean@livingroomre.com