John Meussner, #MortgageMadeEasy Fair Oaks, CA 484-680-4852 (Mortgages in AZ, CA, CO, DE, FL, GA, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI)

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Liz and Bill Spear
RE/MAX Alliance 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Alliance Cincinnati & Dayton suburbs

John, In my area I'm seeing some listing agents refuse escalation clauses outright.  Just give us your highest and best, PERIOD.  I don't know if it's because doing the math for an escalation clause just makes their heads hurt, or if they just like having the buyers bid against themselves. 

We're in a market where the comps mean little to nothing, and what I THINK a home should sell for isn't tied to reality. 

Personally, I can't see anything to be gained by a double escalation clause that couldn't be accomplished with a single.  You've already tipped your hand as to the max you're willing to go when the listing agent sees the 2nd escalation clause, so what is gained?

Apr 14, 2022 11:48 AM
Rainmaker
1,419,670
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

That's not something I've seen before.  Seems counter productive to have two of them.  One at the higher number would make much more sense.

Apr 14, 2022 11:51 AM
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3,134,022
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

What is the point? The second escalation negates the first one - what am I missing?

Apr 14, 2022 01:05 PM
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Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 I've never seen a "Standard Form" for that.

         Is the Agent trying to practice law without a license?  

Apr 14, 2022 01:21 PM
Rainmaker
1,355,799
Gary Frimann, CRS, GRI, SRES
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

Seems crazy and may void out the offer all together due to a lack of certainty and definiteness of terms.

Apr 14, 2022 03:31 PM
Rainmaker
988,451
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I do not support the escalation clause strategy. As a listing agent, if I receive an offer with an escalation clause, it will get a counter to the max of the escalation clause amount unless I had another offer that was still better than that max. An escalation says to me that the buyer wants to pay less but will pay more if needed. It is a silly way to try to negotiate a lower price while telegraphing the message to the seller that you are willing to pay more if you have to.

Apr 14, 2022 02:45 PM
Rainer
347,070
Caroline Gerardo
Sun West Mortgage Corporation - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Doesn't seem like it helps buyer get in front of anyone

Apr 14, 2022 11:58 AM
Rainmaker
729,161
Steve Higgins
RE/MAX Kelowna - Kelowna, BC

It's not normal here. I have not done it or have I seen it before. Only benefit would be your client may have a better chance of getting the home, however if you come in with your best offer that should be suffice.

Apr 14, 2022 06:56 PM
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Anna Banana Kruchten CRS, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

No  I have never seen a double escalation clause.  And honestly most sellers in our hot market do not want to see any escalation clause - period.  Give us your Highest and Best  offer, upfront,  including an appraisal waiver addendum etc.

Apr 14, 2022 02:31 PM
Rainmaker
865,538
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

No. Doesn't make a lot of sense to me. Just submit your highest and best offer and it will either work or it won't. Many of the escalation clauses I've seen are capped at around $5000.00 above list.

Apr 14, 2022 03:58 PM
Rainmaker
1,754,673
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

Nope, never seen it but ..... evidently this agent thought that might work. I think it is just starting all over again. 

It's not hurting the buyer or seller at all doing this it just seems repetitive. I don't think it is game playing. It's just a strategy.

If a listing agents head is going to hurt adding $15K over the highest offer they should get into another business or bring a calculator.

Apr 14, 2022 12:55 PM
Rainmaker
799,768
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

Most agents are refusing escalation clauses because you cannot show the highest offer so you cannot prove to the buyer that you need to go higher. I don't understand the two clauses. Maybe they did one and changed their minds, increased it and accidentally sent both?nmmF

Apr 15, 2022 06:51 AM
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Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate Brokered by Real - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Have never seen or used one John but greed is very prevalent in some markets. Our broker prefers we do not use them!

Apr 14, 2022 06:23 PM
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Alan May
Jameson Sotheby's International Realty - Evanston, IL
A moving experience!

I've never seen the double-double here.

Plenty of escalation clauses, but no preambles.

Apr 14, 2022 01:36 PM
Rainmaker
1,035,465
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

My seller received an offer with an escalation clause that bettered any offer or counter offer by $1000.  I don't like escalation clauses & think the use of should be prohibited.

Apr 15, 2022 07:42 AM
Rainmaker
2,048,635
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

If you have 15-25 offers - Which Offer’s Escalation Clause Trumps what other Escalation Clause ( assuming they All have one )
Utter madness !

Apr 15, 2022 07:22 AM
Rainmaker
783,607
Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

Oh please no! I'm not convinced that agents are properly explaining ONE escalation clause to consumers.  I can't imagine adding another! 

Apr 15, 2022 04:34 AM
Rainmaker
518,443
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

No I have not seen  a second one before. As a listing agent I call for highest and best. When the Seller counters an offer with an escalation , I recommend they counter the front page of the offer and ignore the escalation addendum.

Apr 15, 2022 03:29 AM
Rainmaker
1,657,539
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

It's all ridiculous.  Might as well just pay double the asking price.

Apr 14, 2022 08:19 PM
Rainer
350,089
J.R. Schloemer, CRS
Kentucky Select Properties - Louisville, KY

One of the best offer they can submit. I’m not wasting time and paper on a second escalation clause.

Apr 14, 2022 08:14 PM
Rainmaker
1,132,026
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Using one clause would be damaging enough in my opinion and two escalation clauses is plainly absurd. Keep it simple, give it your best shot and don't get caught up in the game play.

Apr 14, 2022 07:34 PM
Rainmaker
4,466,436
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Not a fan of escalation clauses. Go in with your highest and best and be prepared to walk!

Apr 15, 2022 04:52 AM
Ambassador
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Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

I like what Anna Banana Kruchten CRS, Phoenix Broker has to say:

 Give us your Highest and Best  offer, upfront,  including an appraisal waiver addendum etc.

Apr 14, 2022 11:12 PM
Rainmaker
5,217,713
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I hate using escalation clauses at all, so would never have two of them.

Apr 15, 2022 12:36 PM
Rainmaker
932,407
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Crazy. I am glad that in my area we don't use AN escalation clause, let alone more than one.

When I worked for Pru during the last boom, our broker said NO escalation clauses, we are not getting in trouble later if someone eBay bids and regrets it. LOL pretty prescient statement in 2004!

Wasn't long after that that Arizona instituted the Market Conditions Advisory.

AKA the 'we don't have a crystal ball and you might have screwed the pooch' advisory.

Apr 15, 2022 06:40 AM
Rainmaker
2,677,680
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Every piece of Real Estate I ever wanted/pursued etc., was purchased e-z- peasy nice & breezy with emphasis on doing what it takes to get it. 

Apr 15, 2022 06:29 AM
Rainmaker
949,677
Peter Mohylsky. BRIX REALTY
Brix Realty - Destin - Miramar Beach, FL
BRIX REALTY -DESTIN

Never heard of it, why?

Apr 15, 2022 04:38 AM
Ambassador
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Not normal AT ALL! And, it something that we cannot accept here in NC OR SC. When agents present them, I tell them we are not allowed to accept them and their buyers will need to come back, putting their best foot forward. If they're willing to go $X over $X, then state that price on the revised Offer!

Apr 16, 2022 12:41 PM
Rainmaker
1,663,301
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

I've never heard of it before, what is the point? This market is bringing out all the crazy stuff.

Apr 16, 2022 04:54 AM
Rainmaker
592,959
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

Never seen this - although we do use escalation clauses.  If I represented a seller in this scenario, I would suggest countering that offer - eliminating the escalation clause - at the highest price the buyer noted they would agree to purchase per the highest escalation clause.

Apr 15, 2022 08:25 PM
Rainer
296,897
Don Baker
Lane Realty - Eatonton, GA
Lake Sinclair Specialist

sounds dumb

Apr 15, 2022 11:46 AM
Ambassador
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Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Seems unnecessary to use two clauses to get to the same top price.

It could be that the buyer's agent is just trying to soften the number that they know the buyer will eventually have to pay by putting it in stages.

Apr 15, 2022 08:37 AM
Rainmaker
2,007,421
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

I have not heard that - I don't understand the reasoning!   In DC and the area of MD near DC, you submit an escalation clause and the seller must come back to you with the winning bid - and then you have the right to say yes or no to the "winning bid" as it is considered a counter by the seller - in Virginia when the seller comes back to the buyer with a number (as long as it is within the structure of the escalation clause) the buyer is stuck with that number. 

Apr 19, 2022 02:50 PM
Rainmaker
683,065
Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Group Valencia & Aliso Viejo

I don't believe in an escalation clause as it presumes that the buyer is the richest person in the world and can out bid everyone.

Apr 16, 2022 08:24 PM