Michael Mahoney - Boston Realtor with Century 21
Michael Mahoney
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What is an Escalation Clause in Real Estate

What is an Escalation Clause in Real Estate?

An escalation clause is a real estate contract, sometimes called an escalator, that lets a home buyer say: “I will pay x price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer to y price.”

In some cases, buyers want a ceiling because they are not willing to exceed their budget. Make sure you discuss if there is a “cap” on how much your client is willing to go.

 

Our office does not have any standard language that we use for an escalation clause at this time. It’s really dependent on each individual deal and how high someone is willing to go.

There is a disclosure from the Massachusetts Association of Realtors which explains what an escalation clause in. It may be useful when you are having a dialogue with a client.

Escalation Provisions in Offers (MAR 520) (version 1)

Download MAR Escalation Clause Here

 

 

 

A few Related Articles from Realtor Magazine and Realtor.com about escalation clauses

Buyers Use Escalation Clauses to Win Bidding Wars

Make an Offer That Sellers Can’t Refuse

What Is an Escalation Clause and When Should You Use One?

Michael Mahoney is a Realtor with Century 21. This should not be construed as legal or financial advice. Please consult your attorney before signing any documents related to the purchase of a real property.

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I selected Mike after having a very unsuccessful experience with a previous broker. He had excellent ideas in helping to sell my house and continued to advertise it with a fresh perspective. His experience helped in a number of ways and I only wish we had... (more)

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This is the second property I have sold in Weymouth MA with Mike as my broker. He research the area and give you all the information you need to decide what to list your property for, so it sells timely. He also helps review and negotiate all offers and is... (more)

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