As the residential market softens, sellers often turn to this tool to regain a bit of an edge: the bump clause.
The bump clause allows certain sellers to continue marketing their home after entering into a contract with a buyer. The technique is often employed when the buyer’s offer comes with a proviso, like that they need to sell their current home first. The bump clause helps sellers pressure buyers into finalizing the deal or to ultimately find a better offer.
The bump clause tends to be more popular when markets are “transitional,” David Reiss, a Brooklyn Law School professor who specializes in real estate, told the Wall Street Journal. Douglas Elliman’s Rebekah Carver said bump clauses haven’t been common in Brooklyn, but she recently represented a buyer on a deal where the seller hesitated to sign the contract without the bump clause — even though the home had sat on the market for six months.
The clause helped “give the seller some sense of security and comfort,” she said. [WSJ] — Kathryn Brenzel