A buyer in California includes an escalation clause in her offer on a home in Walnut Creek, stating she will pay $5,000 more than any competing offer up to a maximum of $800,000. The listing agent receives another offer for $760,000. Under California law, what obligation does the listing agent have regarding the escalation clause?
Correct Answer
C) The listing agent must present both offers to the seller and explain how the escalation clause works
Under California Business and Professions Code §10176(e), the listing agent must present all offers to the seller. This includes offers with escalation clauses. The agent should explain the mechanics of the clause and let the seller decide how to respond. The agent has no authority to modify or reject offers.
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