Yes - you are never obligated to honor the escalation mechanic. You can reject the entire offer and counter the buyer at or near their revealed cap. This captures their maximum willingness to pay without needing to prove a competing bid exists. Most buyers will accept because they already committed psychologically to that number by writing it into their clause.
From the seller playbook: Escalation Clause Strategy and the Maximum Cap Trap
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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