 
My La Crescenta listing on Hamilton  closed this week.
I, as do most real estate agents try to cut down on printing; there is so much paper waste in a real estate office. I received somewhere around 20 offers. Most were over asking price and several were from cash buyers. I only printed the three best offers.
I knew both the buyer and the seller, but that isn’t what got my buyer’s agent offer accepted.
It’s a seller’s market, and most Los Angeles homes sell with multiple offers. The buyer submitted a strong offer. It included a personal letter, a preapproval, and proof of funds to close. Nearly every competing offer did the same.
Since the home was vacant, the buyer also offered a quick close. Most other buyers included that term as well.
So what did the buyer’s agent do to make her offer stand out?Â
She used an escalation clause. Her buyer submitted an initial offer at a set price. Then, he added a condition. If the seller received a higher competing offer, the buyer agreed to increase his price. The new price would beat the competing offer—but only up to a specific maximum amount. This gave the buyer a competitive edge while still setting a limit.
Let’s break that down:
An Example:
Asking Price $750,000
Buyer agrees to increase their purchase price to be $5,000 higher than seller’s best offer not to exceed $785,000.
In the event that seller receives an offer of $765,000 the buyer’s offer is escalated to $770,000 (saving the buyer $15,000).
Note: The seller is under no obligation to accept the escalation clause.
Is an escalation clause the way to go? Not always, when representing the buyer, a Realtor needs to be certain the seller’s real estate agent understands the escalation clause. Some real estate agents are easily confused and a savvy buyer’s agent does not want to annoy the listing agent.
Will an escalation clause put off the seller? It might, the seller might resent the fact that the buyer just won’t write their best offer.
Related Post: How to Craft a Winning Offer
