Contracts
An 'escalation clause' in a purchase offer allows:
AThe seller to raise the price if the property appraises above the offer price
BThe buyer to automatically increase their offer by a specified amount above competing offers up to a maximum price✓ Correct
CEither party to terminate the contract if interest rates rise
DThe broker to increase their commission if the property sells above the list price
Explanation
An escalation clause automatically increases the buyer's offer by a set increment above the highest competing bona fide offer, up to a specified maximum price. It is used in competitive markets to help a buyer win a bidding war.
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