Escalation Clause

If a buyer wishes to utilize an “Escalation Clause” there are many things to consider. See article below. Included here is sample language to base an Escalation clause from, but agent and client must consider any unique circumstances in the offer scenario. The below clause sample is not a “Catch All” escalation clause.


“If, prior to Seller’s acceptance of the terms in this Purchase Contract, the seller receives one or more additional written, bona fide offers to purchase the property with terms acceptable to the seller (“other offer(s)”), and from which Seller would receive a higher Net than the net reflected in this offer, then this Contract’s Purchase Price shall automatically increase by $___________ above any other Offer’s net to Seller, not to exceed a maximum sale price of $_________________. If other offers include escalation terms, this automatic increase can be used multiple times up to the maximum Purchase price noted. If escalation clause is initiated and this offer is selected, Seller shall provide proof of the competing offer to buyer, and an addendum shall be executed stating the final Purchase Price and terms by both parties for clarity.”  Proof can be given by providing a copy of either the entire REPC or the first page of the REPC showing the competing offer’s purchase price.  (Note: Agent should black out the competing Buyer’s name and signature from the offer).