Monday, March 14, 2005

Escalation Clause

I am in Vegas at a Real Estate Convention. And the talk of the town is "Escalation Clause," that is when an offer is written and a clause is inserted that states you will pay X percentage over the highest offer received. The group I was talking to was from Seattle, WA. She told me the last offer in Rainier Beach that she did was written with a 35% escalation clause. I asked about the appraisal? How does it appraise, she said they do. I find that odd. Here in Miami we are not doing many if any escalation clauses on contracts because we know the fight we will have to get the appraisal up and or the buyer pays over appraisal. I am enjoying hearing about the different markets. But I hear of no "bubble" in these markets any time soon.

3 Comments:

Anonymous John said...

Hi,
I was searching the web for Keys Gate websites and I came along this one. I am a excited future Palm Isle homeowner. Anyone elso from Palm Isle or keys gate on this blog? I hope ther are satisfied customers out there.

take care.
John

10:44 PM  
Blogger Grunt said...

Manhattan brokers would have a field day with this clause. I am not sure sellers would go for it.

9:28 PM  
Anonymous Anonymous said...

Frighteningly, escalation clauses are all the rage here in Hampton Roads, VA, as this column suggests.

I suspect the only way these appraise out is because the mortgage companies pick the appraisers that will tell them what they want to hear.

It's just a trend, though. In a few years, foreclosures will be all the rage.

6:09 AM  

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