Which clause in an offer allows the buyer to automatically increase their bid if a better offer is received?

An escalation clause is a provision in an offer that allows a buyer to increase their bid automatically if a competing offer is received. This clause is particularly useful in competitive real estate markets where multiple bids may be presented for the same property. By including an escalation clause, the buyer can remain competitive without needing to submit an entirely new offer.

The clause typically specifies a maximum price the buyer is willing to pay, allowing them to incrementally increase their bid to a certain threshold above the highest bid received. This gives the buyer a strategic advantage while still maintaining a clear limit on their investment.

Other options such as equitable redemption, equity, and encumbrance refer to different concepts in real estate and finance. Equitable redemption relates to a borrower's right to reclaim property after foreclosure by paying the outstanding debt. Equity typically refers to the ownership interest in a property after accounting for any debts secured by that property. Encumbrance involves any claim against the property, such as a lien or mortgage, that may affect its transferability, but none of these relate to the automatic increase of a bid in the context of competitive offers.