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MARKET UPDATE -- ESCALATION CLAUSES BACK IN THE MIX

escalation-clauseIt continues to be a crazy busy spring into summer real estate season. We're seeing more homes becoming available and they're quickly being snatched up, so it's still a tight market for buyers out there. And while it is a seller's market, I have been noticing more buyers walking away if a home isn't reasonably priced, or the seller pushes too hard.

I see this as a self-correction of the market, where even though demand is high, it's not causing people to lose their patience or perspective. And I'm also seeing more buyers that are well-prepared with reserves and solid financing lined up. These two things together give me confidence that we'll continue to see steady growth that won't spiral into a bubble.

One tool savvy buyers are using, particularly with many available homes receiving multiple bids, is an escalation clause. Simply, this is a promise by the buyer to top any other offers by a set amount ($1,000 for example) up to a set limit. As noted an article in The Boston Globe, this can give buyers the edge they need to get the home they've set their sights on.

And, as with any tool, this is something to be used carefully and in coordination with an experienced real estate agent.

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