Have you received multiple offers on your home that is up for sale, and is one of those offers is an escalation clause? This means that the buyer is willing to pay a specific amount of money above the highest bid in order to win the home, all without formally providing you with an offer price. Here are a few ways you can handle an escalation clause if you receive one. 

Reject The Offer

Even though an escalation clause may technically be the highest offer, you don't have to accept it. You may be more interested in accepting the actual highest price offered since they were willing to list an exact price. Accepting a lower offer could be due to the buyer being able to secure financing easier, being easier to deal with, or simply having preference to them listing an exact price.

Ask To Revise The Offer

You always have the option to tell the seller that you are not accepting escalation clause offers on your home. You can then give them the option to revise their bid with an actual price, and let them know that you are only accepting serious offers. This can be a good strategy if the highest offer is still low, and you want to see how much higher buyers are willing to pay for your home. 

Accept The Offer

Escalation clauses can often be tricky with the terms that are associated with them. If you accept the offer, part of the escalation clause may be that the buyer still has the right of last refusal. This means that if the highest offer was much higher than anticipated, then the buyer with the escalation clause can walk away. The buyer may also request to see the highest offer to ensure that they are paying the exact amount that they agreed to. There may also be an upper limit to how much the buyer is willing to spend on the home that must be considered.

Provide A Counteroffer

Know that you never have to agree to the terms that are listed in the buyer's escalation clause. Still feel that it is too low of an offer? Then you can provide a counteroffer for a higher amount. You already know that the buyer really wants your home due to the nature of offering an escalation clause, so it is possible that they are also willing to go higher than the amount they originally offered. If the buyer rejects your counteroffer, you can always go back to accept a previous offer that was made on the home or counteroffer again. 

For more advice on what to do in the case of an escalation clause when selling your home, talk to a real estate agent in your area.