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Ready to top all bids?

Posted by Scott Van Voorhis April 14, 2014 02:11 PM

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Enough of the debate over whether bidding wars are for real.

I know, I know, there is surely a case or two out there where some rogue agent is using phony bids to drive up the price of a house.

But the bidding wars, by and large, are here. And not only are they here, they are getting increasingly out of control.

This Globe piece by Jay Fitzgerald finds that a bubble-years phenomenon - the "escalation clause" - is making a comeback as home and condo prices go nuts.

Buyers fed up with winding up on the losing end of multiple-bid situations are turning the tables and building escalation clauses into their offers.

Basically, it's an offer that automatically increases by a certain amount above whatever the highest bid for a home or condo turns out to be.

One couple featured in the story, Katrine and Stephen Campbell, offered to top any bid by $5,000.

The move helped fend off 10 other bidders and land them a four bedroom in Reading for just under $600,000.

The bad news? They paid $18,000 over the listing price.

"We must have looked at 50 places before making a bid on a house," Katrine Campbell told the Globe. "We made only one offer - and we got it. The escalation clause gave us an edge."

Are escalation clauses a sign that bidding wars have gotten out of hand? Or is this just a case of resourceful buyers and brokers doing what it takes to win in a hyper-competitive market?

What's your vote?

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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