Sellers are turning to the “bump clause” as the city’s resi market cools
Clause gives sellers some leverage
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