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How do escalation clauses work, and in what circumstances?

Asking in hindsight and in general.

My example: we bought our home at $405k. Listed at $420k, then dropped to $407k one week later.

We put an offer on our house at $402k. The day we viewed it--and the day we put in the offer--there were at least two other viewings, before and after us, though the house was on the market for just over a month then.

The listing agent asked for best and final, because there are competing offers. Listing agent told my buying agent that another offer was at original listing price, so $18k over us.

We counter-offered at $405k plus an escalation clause at $1k above the other offer with proof. We were willing to go to $425k exactly, but not happily. Our agent suggested the escalation clause so we went for it.

The selling agent countered with, "the other offer has a selling contingency, so we can ignore the escalation clause, the house is yours at $405k".

Was there no other offer? If there were, surely they would've used our escalation clause?

Or do escalation clauses only apply to "like" offers, so if we also had a selling contingency?

submitted by /u/recercar
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source https://www.reddit.com/r/RealEstate/comments/hiyi8a/how_do_escalation_clauses_work_and_in_what/
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