Is your client loosing out on a HOT FORECLOSURE PROPERTY? Try an Escalator Clause

In any market, a really well priced property will have multiple offers. Currently, with the wave of foreclosures that we have seen hit the market, aggressive buyers are taking advantage of this and know that this is the right time to buy. But just as you can lose a property in a seller's market by being outbid, you can also in a buyer's market with the same thing happening. How can you be sure that you be the winning bid? Try what is called an Acceleration Clause. First you must determine how high of the property in question is worth and attach this clause to your offer. You can attach a seperate sheet, but if you are in California, I suggest put it on an Addendum to the Purchase Contract.

Below is how you can craft the Escelator Clause:

Escalator Clause Addendum


The following is part of the Residential Purchase Agreement and Joint Escrow
Instructions dated ___________.

Between ________________________________ (“Seller”)
and _______________________(“Buyer”)
concerning _______________(“Property”)


IT IS AGREED BETWEEN THE SELLER AND THE BUYER AS FOLLOWS:

In the event another written offer is presented to Seller on or before acceptance of this offer, Buyer agrees to increase his/her/their offer to the amount of that offer plus ___$X_______ with the total amount* not to exceed $_____$X_________ on the condition Seller provides Buyer with a copy of signed offer from the other party. This offer is contingent on buyer excepting seller’s final acceptance.

*(After Seller concessions/credits to buyer are subtracted, Seller proceeds will be higher with this offer by the amount Specified above.)


Initials: Buyer _______________ Buyer ___________________ Date ___________
Seller ________________ Seller ___________________ Date ___________

Remember, the key is to determine if the property is worth doing this and if you are competing against multiple offers.