Use An Escalation Clause As A Means Of Negotiating

A seller may use current market trends and the value of residential homes within their region as a means of coming up with an asking price for their home. A seller's real estate broker may have an influence on the asking price too, often driving it up more than what a seller initially considered. If your real estate agent has mentioned an escalation clause as a means to negotiate the price that you will be responsible for paying for a listed home, learn how this clause may aid with getting your offer accepted.

Avoid Multiple Counteroffers

A home seller who isn't in a rush to sell their residence may be adamant about receiving the highest bid possible. When a person has vowed to remain steadfast about a monetary amount, a lot of negotiating may come into play. Your real estate agent will act as the liaison between you and the seller. They will be responsible for contacting the seller or the seller's broker and providing an offer.

If you were to offer an amount that was much lower than what the seller wants, there is a good chance that the seller will reject your initial offer. With this type of situation, you may need to make multiple counteroffers. Due to the wasted time that this type of scenario is noted for, preparing an escalation clause may be a better option for you.

Prepare An Escalation Clause

Many real estate agents use escalation clauses as a negotiating tactic. An escalation clause is a typed statement that describes how much a buyer is willing to pay for a listed property. The clause will typically outline how much more a buyer is willing to spend, in comparison to the highest bid that a seller receives.

The amount could be considerably higher, which can be enticing to a seller. First, a buyer will need to find out how much money they can acquire through a lender. Next, the buyer will need to meet with their real estate agent. The agent will discuss how a negotiation clause will work. The buyer can offer to exceed the monetary amount that a seller receives from their highest bidder. They should also be ready to provide the maximum amount that they are willing to pay for a home.

Being direct like this tells a seller that a buyer is serious about making a purchase. If the seller does not receive the asking price that they listed their home for, they may be inclined to accept the offer that a potential buyer has furnished through their escalation clause. 

For more info, contact a local real estate agent.