Answer :
An escalator offer is a specific type of offer in real estate transactions where the buyer commits to automatically increase their offer to outbid competing offers up to a certain maximum limit.
Let's go through the options to identify which one constitutes an escalator offer:
1. Buyer offers [tex]$650,000. Seller accepts. - In this case, there is a straightforward offer and acceptance with no mention of adjusting the bid in the face of competing offers. This is not an escalator offer. 2. Buyer offers $[/tex]650,000. Seller counters at [tex]$675,000. Buyer accepts. - Here, the buyer accepts the seller's counteroffer. There is no automatic adjustment of the offer based on competing bids. This is not an escalator offer. 3. Buyer offers $[/tex]650,000. Seller counters at [tex]$675,000. Buyer counters back at $[/tex]665,000.
- This scenario involves both parties negotiating and making counteroffers. However, there is no automatic clause to outbid competing offers. Hence, this is not an escalator offer.
4. Buyer offers [tex]$650,000 with a clause that the buyer will beat all competing offers by $[/tex]3,000 up to [tex]$675,000. - In this scenario, the buyer has included a specific clause stating they will increase their bid by $[/tex]3,000 above any competing offers, up to a maximum of [tex]$675,000. This meets the definition of an escalator offer because the buyer agrees to automatically increase their offer within set parameters. Therefore, the example that represents an escalator offer is: Buyer offers $[/tex]650,000 with a clause that the buyer will beat all competing offers by [tex]$3,000 up to $[/tex]675,000.
Thus, the correct answer is option 4.
Let's go through the options to identify which one constitutes an escalator offer:
1. Buyer offers [tex]$650,000. Seller accepts. - In this case, there is a straightforward offer and acceptance with no mention of adjusting the bid in the face of competing offers. This is not an escalator offer. 2. Buyer offers $[/tex]650,000. Seller counters at [tex]$675,000. Buyer accepts. - Here, the buyer accepts the seller's counteroffer. There is no automatic adjustment of the offer based on competing bids. This is not an escalator offer. 3. Buyer offers $[/tex]650,000. Seller counters at [tex]$675,000. Buyer counters back at $[/tex]665,000.
- This scenario involves both parties negotiating and making counteroffers. However, there is no automatic clause to outbid competing offers. Hence, this is not an escalator offer.
4. Buyer offers [tex]$650,000 with a clause that the buyer will beat all competing offers by $[/tex]3,000 up to [tex]$675,000. - In this scenario, the buyer has included a specific clause stating they will increase their bid by $[/tex]3,000 above any competing offers, up to a maximum of [tex]$675,000. This meets the definition of an escalator offer because the buyer agrees to automatically increase their offer within set parameters. Therefore, the example that represents an escalator offer is: Buyer offers $[/tex]650,000 with a clause that the buyer will beat all competing offers by [tex]$3,000 up to $[/tex]675,000.
Thus, the correct answer is option 4.
