Contracts
An escalation clause in a purchase offer allows the buyer to:
AIncrease their offer automatically up to a specified maximum if the seller receives competing offers✓ Correct
BReduce their offer if the appraisal comes in below the purchase price
CExtend the closing date without seller approval
DCancel the contract without penalty if interest rates increase
Explanation
An escalation clause states that the buyer will increase their offer by a set increment above any competing offer, up to a specified maximum price. It is commonly used in competitive markets to give the buyer a competitive advantage without initially offering the maximum price.
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