One approach to drafting contracts in a multiple offer situation is to use an escalation clause. An escalation clause is verbiage similar to, "Buyer agrees to pay $1,000 more than any other acceptable offer. Seller to provide proof to other offer". This is approach often ensures you are one of the top offers as you are willing to pay more than the best offer.
The downside of escalation clauses?
You play your all your cards especially if you put in a cap to the escalation clause such as "Buyer agrees to pay $1,000 more than any other offer up to $250,000".
Many sellers in the Denver market do not want to deal with escalation classes, rather, they ask for the highest and best offer from the start.
If there is no cap to the escalation clause, you run the risk of being the winning offer for a purchase price you are not approved for and/or for a purchase price above what the home will appraise for.
Speak with your realtor about whether an escalation clause may be suitable for your next offer on a home.
In addition to writing for Daigle's Digs, Elizabeth works full-time as a Real Estate Agent with Keller Williams Realty Downtown, LLC. Elizabeth's expertise is in buying and selling a home, first time home buyers, short sales, and investment properties. Contact Elizabeth for any real estate needs. Cell 303-819.73.71. Work 720-314-8352.
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