What is a Escalation Clause?

A real estate escaltation clause in Utah is where a home buyer is willing to pay a certain price for the home, but if the seller receives a higher offer than that price, then the buyer's offer will "escalate" in price to exceed the competing offer's price.

For example:
Buyer #1 offers $500,000 and uses an escaltation clause not to exeed $520,000 and the offer to be $1,000 higher than any competing offer.

If Buyer #2 offers $505,000 the new price of buyer #1 would be $506,000. Buyer #1 would win.

But if your Buyer #3 offers $522,000 then Buyer #3 would win because its higher than the escalation amount of $520,000.

Other things to consider:

• How high you want that price to "escalate"
• How much you want to exceed a competing offer
• How you define a "higher" offer
• How you will verify that another offer has triggered your offer to escalate in price.

A good recommendation would be to get with your real estate agent/broker to determine what's best.

If you would like to know more about escalation clauses and how it can affect you as a seller or buyer let me know, I'd love to discuss.