Selling
06/26/17 | Liz Lyster
In a competitive seller's market (which is exactly what we have in the Greater Boston area), buyers sometimes write escalation clauses into their offers. But when we're working with sellers, we recommend that they not consider offers with an escalation clause. We will explain why we avoid them, but first let’s talk about what an escalation clause is, and how it works.
As a seller, you will sign a listing agreement with your agent. You have three options regarding how you want any offers on your property disclosed to buyers:
Ellie and I suggest our clients choose #2. This allows us to build excitement about your listing by disclosing the existence of other offers. (Sometimes we have more than a dozen offers on a home—recently we had 18!) However, by not publicizing the proposed offer amounts, buyers are encouraged to create the best possible offer, which tends to push the offer amounts up. You often receive the strongest, most straightforward offers this way, and can move forward with the sale of your home without the hassle of analyzing and breaking down escalation clauses.
The bottom line? If you consider offers with an escalation clause, you risk leaving money on the table. Don’t do it!
If you have additional questions or want to get started selling your home, please contact Ellie and me. We’re here to help.
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