Buyer Tip – Escalation Clause – How to Win in Multiple Offers

If you’re buying a home and you find yourself in a multiple offer situation, of course you want to win the bid, but you also don’t want to overpay for the house.

So the question is, how do you accomplish both of those goals which seem to conflict with each other?

The best way to do this is to utilize the Escalation Clause.

• automatically bids over the other buyers
• places a cap on how high you’re willing to go with your offer

You have to be careful with this, because if you use it in the wrong situation, you can actually give the seller the upper hand by showing your cards – how high you’re willing to go – and that will actually hurt you very badly in negotiations.

I would only use the Escalation Clause sparingly, but in the right situation it can actually help you outbid the other buyers while not overpaying for the house.