What's the true power of an escalation clause addendum?

Real Estate Agent with Home Sales Palm Beach SL3246893

An escalation clause addendum might be in order if the buyers you represent are competing against multiple offers.

If you're dealing with a hot market and your deals are falling short, getting out-bid and your buyers are getting frustrated, read this!

In southeast Florida, prices have excelled far beyond the national inflation median. We've been recommending adding an escalation clause when making an offer. Of course cash is king and proof of funds are a necessary to solidify your offer. 

It's always best to have your buyers understanding the competition in the current market and having access to proof of funds or an underwritten (DU) approval if financing is involved.

The Escalation Addendum PAGE 1 below is pretty straight forward. Buyer and sellers names, address, offer price and check box for the type of contract. In Palm Beach / Martin counties in Florida, we rarely use anything but an AS-IS contract, so much so that our broker has "checked" the AS-IS box as the default.

Florida Realtors Escalation Clause Contract page 1

PAGE 2 of the Escalation Clause Addendum (below)

Florida Realtors Escalation Clause Addendum page 2

I recommend writing the offer on an AS-IS contract, shortening the inspection period to 7 days or less (make sure you have a list of inspectors that are available) and attach that escalation clause.

A few months ago an escalation clause could be $1000 over the highest and best offer, waiving the appraisal contingency and capped out at 10% over list. Things here have changed dramatically. My current recommendations are $2,000 over the highest and best offer, and capping at a generous valuation which is often 12% - 20% over list price.

I always run a home valuation to share with my buyers. And I'm always quick to explain that they may be over paying to an extent in this market. Honesty will get you further than smoke and mirrors!

I let my buyers make informed decisions based upon market values and their desire to buy in this heated market.


Denise Copeland is a 30+ year resident of Palm Beach & Martin County areas and has extensive local knowledge of everything from the housing market, schools and events. 



Denise Copeland - Home Sales Palm Beach - Excellence in Real Estate

Denise Copeland
Licensed Real Estate Professional since 1991

Specializing in Palm Beach & Martin County areas.

2562 W. Indiantown Road #4, Jupiter, FL 33458
4836 SE Railway Ave., Stuart FL 34997

ph: 561-308-0007

Home Sales Palm Beach

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Comments (3)

Roy Kelley
Retired - Gaithersburg, MD

This is good information to share.

I hope you are having a productive month.

Feb 20, 2022 10:22 AM
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Interestingly, most of our listings agents here on the Space Coast are putting in agent remarks...do not bother writing an escalation clause...just give us highest and best by xxx   They put the listing in on Friday night and say Monday at 5pm have your best offer in!

Feb 20, 2022 11:14 AM
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs

Great info about your real estate places. Hope you do well with sales. Have a great time.

Feb 20, 2022 12:03 PM