An escalation clause is used in a Northern Virginia real estate contract when there is a lot of interest from other buyers in a certain property, and you anticipate there could be a bidding war. You typically see these types of clauses in multiple offer scenarios, when a property is priced very competitively, and lots of buyers want it.
Northern Virginia Escalation Clause Defined
An escalation clause is kind of like the max bid function on Ebay – a buyer makes an offer on a property that includes an introductory price they are offering in writing. They include an addendum that says that if any other offers come in that are over their introductory offer, they will increase their sales price to a specified maximum amount. The key here is that in order for the escalation addendum to be triggered, the seller must show proof of a written, bona fide offer that was higher than the buyer’s introductory offer.
When your real estate agent prepares your escalation addendum, you will also specify the margin between your escalated sales price and the next highest offer. In effect, you’re saying that you will beat that other offer by a certain amount of money.
An escalation clause is just one example of different strategies you can use when making an offer on a home. Read more about how to make an offer on a property in Northern Virginia.
In this competitive Northern Virginia real estate market, you need an agent who knows contracts very well, and will fight for your best interests in your home purchase. Call me at 703-462-0700 or email me at DarrenRobertsonHomes@gmail.com so I can go to work for you!