Escalation Clause

What is an escalation clause?

An escalation clause is a clause in a real estate contract that allows the purchase price of a property to increase if a certain condition is met.

For example, if the buyer and seller agree to an escalation clause and the market value of the property increases, the buyer will have to pay more for the property than originally agreed upon.

This clause is typically used when two buyers are competing to purchase the same property.