Texas Escalation Clauses & Austin Real Estate

What is an Escalation Clause?

An escalation clause is a contract provision where the buyer offers one price (which is lower) but stipulates that they will increase this price by some amount if another, higher offer is received, typically with some price cap.

Sample Escalation Clause:

Buyer offers to pay $____ for the home, but if the seller receives a bona fide offer that is higher, buyer will increase the price to $____ above the amount of the other offer.
In most instances, we do not recommend adding an escalation clause to your contract. Why?
  1. They are not the norm in our market

    Escalation clauses are the norm in many markets, which means that listing agents & sellers in those markets understand and expect them. In Austin, escalation clauses are not the norm. This means that many listing agents & sellers are skeptical of this unfamiliar provision. Because of this, escalation clauses can actually work against you if you are competing with a comparable contract with standard terms.
  2. The Texas Real Estate Commission (TREC) warns against them

    TREC has instructed agents & brokers specifically not to enter escalation clauses into special provisions & instructs that any escalation clause must be written by an attorney. Many TREC licensed instructors warn against using an escalation clause under any circumstance. This can cause listing agents to be even more skeptical of these clauses, which can work against you in a competitive situation.
  3. They are contractually ambiguous

    Most escalation clauses require that a "higher bona fide offer" exist in order for the contract to escalate in price. The problem is that "bona fide" can be up to interpretation. Texas is unique that most contracts contain an option period and a seller or listing agent could ask a friend or relative to submit a higher priced offer with an option period. At that point, a bona fide offer has been presented and the escalation clause increases the price of your offer to that amount.
  4. They can communicate indecisiveness

    Sellers & listing agents want the highest offer & best terms in a contract that is likely to close. By offering a lower amount that can escalate to a higher amount, some people interpret that you aren't decisive or sure of your offer price. You reluctantly wil pay a higher amount, but you don't really want to. This can also make a seller or listing agent skeptical of your offer.
 

What Do We Recommend?

Sellers & listing agents want to work with the highest price offer, with the tightest terms, that will close. Unfortunately, a "magic bullet" (other than price & terms) doesn't exist. We recommend that you be very thoughtful about the price that you are willing to pay for any property. That price should be one that allows you to "sleep well". If you win the property, you'll be elated, but if you don't win the property, you won't have any regrets.  

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Niharika Hubli

Working with Lauren Yoder and Sarah Crowson has been an absolute pleasure as my husband and I ventured to buy our first home in Austin, TX.

They were patient with us through out the process allowing us to digest it all make clear decisions. While we bought our home while physically being in California, it brought a lot of challenges with viewing, closing etc. Lauren and Sarah made it a priority to include us in all steps of the process and went above and beyond to keep us in the loop and make sure we are comfortable!

If you are looking to buy a property in Austin, I highly recommend Lauren and Sarah from Bramlett Residential. They are professional, friendly, honest, extremely resourceful and make buying a home easy!

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Chris Kirk helped us look for a house in the Austin area and found an amazing property that we were going to close on in the North Austin area. Then at the last minute, work took us to San Antonio instead. Rather than ignoring us once we told him about our change of location, Chris pointed us to a great agent in San Antonio who helped us close on a new home this April. The entire time we worked with our new agent, Chris stayed in contact to see how things were going, from the time we started looking until we closed and even after. Even after we moved in, Chris made sure to reach out and see if there was anything he could help us with. All around professional and phenomenal guy!

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Kasey recently helped my wife and me with both the sale of our home as well as the purchase of a new home in Austin Texas. My wife and I have worked with over 15 real estate brokers and agents on several real estate transactions over the years and I can say with confidence that Kasey is the best we have ever partnered with. Kasey has the qualities that make her an extremely successful and effective real estate agent. I can’t say enough about her professionalism and knowledge within the industry. She has extremely high integrity, very conscientious, tenacious and a great advisor while always keeping the client’s best interests in mind. Kasey is a pleasure to work with!!!

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Erin Szczerba is the absolute best! She found us the perfect gem of a house! Erin was thorough, professional and great to work with. She kept us apprised on all the necessary details and worked hard to ensure a smooth closing transaction, even with us being 1,000 miles away. She was honest and forthright – no games. After dealing with many agents across the USA over the years, we can honestly say Erin is incredible! She stands out from the crowd! Highly recommend!

Westley Burger

We were first-time home buyers in the crazy Austin market and Erin Szczerba was an amazing agent who helped us successfully find a great home. She helped us learn about the buying process and had a lot of great advice along the way. Erin was very responsive and was able to set up viewings for us on short notice which was very helpful in the hot Austin market.The financing team that she recommended was also a great resource and was able to help us put offers in on short notice. With Erin’s help, we were able to get a winning offer in our our house just a couple hours after seeing it on a Saturday morning. We are very grateful to her for all her help and would definitely recommend her to anyone looking to buy in Austin region!

Kim Ziessler

Kasey Gilliam with Bramlett Residential Real Estate is by far the best realtor I have ever worked with. Eric Bramlett the owner has also been great through the entire process. My husband and I have bought and sold over 15 homes in the last 40 years so we have a lot of realtors to compare her too. Kasey is a true professional in every since of the word. She showed us a lot of homes over the last 1 1/2 years but never wasted our time with homes she knew wouldn’t work for us. Her honesty and her attention to detail was spot on. She was always accessible no matter when we contacted her. Kasey and her assistant Kim worked hard from showings, offers, contracts, working with title companies and other realtors. I would recommend Kasey Gilliam to my family and friends or anyone looking to buy and/or.sell in Austin. Trust me she works hard and knows her stuff.

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My husband and I sold our house in North Austin, Texas with the help and beautiful work of Kasey Gilliam and a team from Bramlett Residential Real Estate. We were thinking that the process of selling our house would be stressful and tedious, but was exciting every day. Up to date information was giving from the agency each time a house was listed in our area, and helped us to determined the most competitive price for our house with great results. They helped us in every stage of the process, from making our house attractive for a good price for listing it, to maintaining it in good shape, to until the closing process. We are so satisfied that we recommend their services.

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Trey Blanco helped us buy our first home in one of the hottest markets in the country and we couldn’t be more thrilled! We are so grateful to have had Trey on our side, and can’t recommend him enough.

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Kasey Gilliam with Eric Bramlett Residential successfully guided us through the house selling process from the very start when we were planning to sell, through deciding what improvements to make, taking photographs, listing, and closing. From the very beginning of our conversation, we knew we’d scored a pro who we could trust to give us solid advice and keep us on track, and that is exactly how it went down. She kept us apprised of the market with just the right amount of email updates. She was willing to work with our timeline, even when it changed a bit, and kept all the details managed and smooth, so that we didn’t need to. I would recommend her without hesitation to anyone looking to sell.

Ross G

Chris Kirk has been working with us in the Austin area looking for a home for the past several months and was there working diligently every step of the way. From looking at and scheduling viewings and working with other relators and business to help get us what we wanted. Chris was always knowledgeable and compassionate with our needs and fears, and never once left us hanging and if he said he was going to do something or check on it, it was always taken care of. Communication was out standing and he always made sure we understood what was going on and was willing to answer any question we had. Chris was spot on with his readings of the market and finding us the right house for our needs. He really does treat you like family and to me there are no better hands to trust a very serious purchase to. Even after the purchase he is there to help and work with you and that is some amazing customer service.

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Agent: Linda Baddour I rarely write reviews, and almost never 5 stars. However, my experience with Linda was far beyond any I have had with other (many) realtors, and I really have no criticisms or suggestions to her at all. She had excellent knowledge of local market, Especially north Austin where she has greatest familiarity. She listened well!! Can’t do well without doing that. Showed appropriate homes, and knowledgeable about each one. Very accommodative for intense 48 hours of driving around as I am out of towner. Suggested good bids which were successful resulting in purchasing 2 homes in that time frame. Then meticulously followed up on every detail, setting up inspections, getting amendments, getting repairs, following up, and closing smoothly. I was out of town after making the offers, and she performed as if I were looking over her shoulder. Excellent communicator, people skills and a pleasure to work with. I have recommended her to others where I am and they will seek her out as remote investors, given my experience.

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