Contracts
What is an escalation clause in a real estate purchase offer?
AA clause allowing rents to escalate
BA provision automatically increasing the buyer's offer by a specified amount above any competing offer up to a maximum price✓ Correct
CA clause allowing the seller to increase the price
DA provision for price escalation based on inflation
Explanation
An escalation clause automatically increases the buyer's offer by a specified increment (e.g.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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