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House Offer With Escalation Clause In Queens
Category:
State:
Multi-State
County:
Queens
Control #:
US-0028LTR
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Word;
Rich Text
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FAQ
Typically, escalation clauses are not a common strategy in the NYC market, but in the right circumstances, they can work. However, they can also backfire when not used appropriately. We discuss what buyers need to know about escalation clauses, what they are, how to offer one, and the risks.
However, buyers need to be careful with these clauses as they can sometimes backfire. “An escalation clause needs to be in conjunction with a really good offer,” said Madani of Room Real Estate. “It's really the whole package to get your offer accepted.”
However, buyers need to be careful with these clauses as they can sometimes backfire. “An escalation clause needs to be in conjunction with a really good offer,” said Madani of Room Real Estate. “It's really the whole package to get your offer accepted.”
The use of escalation clauses may also lengthen the negotiation process, a potential disadvantage to sellers and buyers. The buyer who is unsuccessful in a negotiation where a competing buyer used an escalation clause may feel that they were treated unfairly.
The reason why sellers don't want escalation clauses is simple: It introduces the risk that they'll sell the house for less than what would be your best and final offer.
Yes. Given that the enforceability of such a contract is not 100% assured, and given the potential pitfalls as discussed in the previous questions, the buyer should be advised to speak with their own legal counsel prior to making such an offer.
Escalation clauses in my area are very common and have been quite successful, but $1000 is pretty much the standard.
