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One of the most common questions I hear from buyers at open houses is: “Do you have an offer deadline?” Buyers in the Los Angeles area are generally pretty savvy and well aware of the strategy of listing agents setting a specific date to review offers. But many sellers don’t fully understand this approach—or the pros and cons that come with it. Here are a few things to consider:

As a seller, you can choose to review offers as they come in, or you can set a deadline for buyers to submit their offers. Promoting a deadline can create urgency, encouraging buyers to act quickly. It can also signal strong interest in the home and help generate multiple offers at once, which often gives sellers more leverage to negotiate a higher price and better terms.

That said, setting an offer deadline can be a calculated risk. If a deadline is heavily promoted but no offers come in, it can weaken your positioning and make buyers question the level of interest in the home. In some cases, buyers’ agents may even skip showing the property if they feel they don’t have enough time to prepare a competitive offer. Deadlines can also be less effective for highly unique properties that may not naturally attract multiple offers at the same time.

Ultimately, the decision to set an offer deadline should align with your overall marketing strategy. If your home is well-priced, in a competitive area, and supported by strong marketing, a deadline can be a powerful tool. But if you’re not in a rush or are waiting for a very specific type of buyer, a more flexible approach may make more sense.

Kari Carson

DRE #01903828

(818) 424-5537

kari@karicarson.com

Neighborhoods Served: La Canada Flintridge, La Crescenta, Montrose, Glendale, Pasadena, Eagle Rock, Highland Park, Greater LA area

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An escalation clause is a written stipulation stating that a buyer is willing to pay a certain amount above the highest verifiable competing offer in order to secure acceptance. In theory, it makes a lot of sense. If a seller believes you’re willing to outbid any competing buyer, they may be more inclined to work with you before making a final decision and give you the opportunity to come out on top. Buyers will typically submit a strong initial offer, along with language stating they are willing to pay a specific amount above the highest competing offer, up to a maximum purchase price. For example, a buyer may offer $1,800,000, while stating they are willing to pay $5,000 above the highest verifiable offer up to a cap of $2,000,000.  I have also seen buyers write escalation clauses with no cap at all, implying they are willing to pay a set amount above any competing offer regardless of the final price.

The complication involved with either structure is that they typically create an additional negotiation step. In order to finalize the purchase price, the seller usually has to issue a counteroffer reflecting the escalated amount, and a binding agreement is only created once the buyer signs that counter. But there is no guarantee the buyer will ultimately agree to move forward at the escalated price, so the clause often functions more as a “right of first refusal” than a firm commitment. This can create uncertainty for sellers and potentially delay the process while other strong offers remain on the table.

Another potential drawback – especially with capped escalation clauses – is that buyers are effectively telling the seller, “We’re willing to pay this amount, but only if we absolutely have to.” I recently received an offer on one of my listings with an escalation cap that was $300,000 over the asking price, and it was difficult to explain to my sellers that the buyers were not actually offering that amount outright. Instead, they were using the cap to signal a high level of interest in the property.

Because of this, it’s always important for you agent to have a conversation with the listing agent ahead of adding an escalation clause. Some listing agents specifically request that buyers avoid them entirely in an effort to streamline negotiations and create cleaner, more straightforward offers. That said, if the listing agent and sellers are open to escalation clauses, they can sometimes provide buyers with one final opportunity to compete on price. Ultimately, the key is understanding how the sellers are likely to react before deciding whether an escalation clause is the right strategy for your offer.

Kari Carson

DRE #01903828

(818) 424-5537

kari@karicarson.com

Neighborhoods Served: La Canada Flintridge, La Crescenta, Montrose, Glendale, Pasadena, Eagle Rock, Highland Park, Greater LA area