Connecticut homebuyers are reviving a pandemic-era bidding strategy as affordable housing inventory reaches critically low levels, according to local real estate broker Rob Marucci. The return of escalation clauses—contract provisions that automatically increase a buyer's offer to outbid competitors—signals a market where scarcity has become the primary driver of competition.
Marucci, broker-owner of Better Living Realty LLC, reports that these aggressive tactics disappeared during 2023-2024 when markets normalized but have now returned as standard practice. "My agents are calling me, and we're trying to get creative on how to make our offer stronger again, because we are getting outbid," says Marucci. "We're using escalation clauses on any property that has multiple offers now."
The inventory crisis is particularly stark in Middlebury, where just 12 single-family homes are listed, with only three priced under $500,000—the range where most buyers can afford mortgages at current rates. This scarcity creates automatic competition among first-time buyers, move-up buyers stretching budgets, and investors, all chasing the same limited properties.
Escalation clauses work by allowing buyers to set a maximum price while offering incremental increases to beat competing bids. For example, a buyer willing to pay $340,000 maximum might offer the full asking price of $320,000, plus an escalation clause increasing their bid in $2,000 increments. If another buyer offers $325,000, the clause automatically bumps the first buyer to $327,000, winning without jumping to their $340,000 ceiling.
"You don't have your buyers overpaying," Marucci explains. "If you just do highest and best, they would have gone $340,000. Now you might get it for $327,000. It protects your buyers and gives them the opportunity to get a property." In his first decade in Connecticut real estate, Marucci never saw an escalation clause, but COVID changed that dynamic, and after a brief disappearance, they've returned as essential tools.
Connecticut's brutal winter exacerbated the inventory problem, with record snowfall of 18 to 20 inches in one storm freezing pre-spring listing activity as sellers delayed plans. "Everything is kind of put on pause," Marucci notes. "Anybody that was gonna list is on pause." Across Connecticut, inventory sits at about two months of supply, compared to the six months considered healthy for a balanced market.
Beyond price escalation, Marucci emphasizes that full mortgage approval versus standard pre-approval letters provides another competitive edge. Lenders now offer complete underwriting pending only appraisal, essentially guaranteeing financing. "If your offer is the same as another offer and the other offer is FHA mortgage, we're going to take the offer that's fully approved," Marucci says. Speed also matters, with buyers needing to view properties same-day and submit offers immediately.
For sellers, Marucci's advice defies conventional wisdom: don't wait for spring. "That could actually hurt your value, because there's going to be a lot more inventory," he warns. "If you're ready to sell, let's put it on the market now. The buyers are still out there. Inventory is super low." In markets where three homes represent the entire affordable inventory, getting creative with bidding strategies isn't optional—it's the only way to compete.
