Mortgage Glossary
Escalation Clause
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
An escalation clause is a provision in an offer that automatically raises the buyer's price above competing offers, up to a stated maximum.
What Escalation Clause means
In bidding wars, it lets a buyer stay competitive without overpaying blindly. The clause specifies the increment above the next-highest offer and a ceiling. Sellers may require proof of the competing bid.
Florida example
A buyer in a hot Orlando market offered $400,000 with an escalation clause beating any higher offer by $3,000 up to $420,000, winning at $409,000.
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