How do real estate escalation clauses work?

Factual Questions
1

In the northern VA real estate market, it is common for people to make offers on houses with “escalation clauses.” As I understand it, the buyer basically says “I offer 400,000, but if someone offers more than that, I’ll go as high as 425,000.”

I have a few specific questions:
It seems like these would be prone to abuse. What proof is typically expected/required that there was another competing offer?

If the escalation clause kicks in, does the buyer get the property for $1 more than the highest other offer?

If there are two equal offers with equal escalation clauses what happens?

Any explanation or additional info on the topic would be welcome

2

Well, the Seller is not obligated to take the highest offer, or any offer. If two offers are identical, the Seller can flip a coin, decide based on the weather that day, or even go with a lower offer.

As far as the “escalation” portion, I would think that if the Seller flat out lied about there being, in your example, an offer of $424,000, the Buyer might have a claim for fraud in the inducement, or some other similar type of fraud claim. If there are lawyers or licensed brokers involved, they would be risking administrative sanction at a minimum.