How can a real estate escalation clause help the seller get more money and the buyer get their house? It’s not an uncommon need among homes for sale in a white hot real estate market like the Fort Lauderdale real estate marketplace, where a dearth of inventory is met with high demand and historically low interest rates.

What is an escalation clause? Once a home goes under contract, if a higher offer comes along, language in the contract does not give the seller an out to ditch the current offer and run with the higher offer. No one wants to leave money on the table.

Savvy buyer agents have a little known tool in their toolbox: the escalation clause. This clause, inserted by the buyer’s agent, says that the buyer will pay a set amount over a competing original offer should the seller receive in writing a better, bona fide offer.

It’s not an unreasonable provision in a market where homes are going under contract in days after listing. It makes sense that a buyer who was first to put ink to an offer should have a chance to meet a counter offer.

Read this article to discover how an escalation clause encouraged a buyer to take a risk – and ultimately get the home they sought, and a price higher than the original contracted price. It can require a gut check by the buyer: Clauses can command a $2,000, $5,000, $15,000 or higher premium over a home’s asking price.

And with mortgage rates at historic lows, a buyer borrowing $300,000 or more over 15 or 30 years would likely be unfazed by the principal and interest on the additional $15,000 tacked on to the purchase price. Talk about a win-win…

Gary Lanham is team leader for the Gary Lanham Group at Coldwell Banker Real Estate Fort Lauderdale Beach Office. To learn more, visit instagram.com/garylanhamgroup or call 954-695-6518.