escalation clause

Definition

A contract provision that automatically increases your offer above competing bids up to a maximum price. It's bidding war automation for people who enjoy financial anxiety.

Example Usage

Our escalation clause kicked in and we paid $15,000 over asking for a house we'd seen once for 20 minutes.

Origin

Adapted from commercial real estate in the 2000s, popularized during housing shortages

Fun Fact

Escalation clauses can backfire when sellers use fake competing offers to trigger your maximum price—perfectly legal in many states.

Source: Real estate offer and negotiation terminology

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