Buying a homeAll terms starting with E
Escalation clause
An offer term that automatically raises your price above competing offers, up to a stated maximum.
An escalation clause states an increment and a ceiling: it beats a verified competing offer by the increment, stopping at the cap. It is a tool for competitive markets where a buyer does not want to bid against themselves.
It also reveals your maximum to the seller, and it does not change what the property will appraise for. Escalating past appraised value creates a gap someone has to fund.
Related terms
- Appraisal gapThe shortfall when a property appraises below the contract price, which the buyer generally must cover in cash.
- ContingencyA condition in the purchase contract that must be satisfied, or the buyer can withdraw without losing earnest money.
- Earnest moneyA deposit made with an offer to show the buyer is serious, held in trust and credited toward closing.
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