I would advise them AFTER I've confirmed whether the listing agent acknowledges that the sellers will consider an Offer with an Escalation Clause. (Some don't here - the Commission doesn't encourage it and many agents don't know how to utilize them. Our area brokerage attorneys have written them for the agents to use and they have been quite effective for many buyers.)

Advise them of your conversation with the LA as well their options and proceed as directed by your buyers.

Explain the sellers request and share what you believe will be winning strategy and let the buyer decide. 

If they want the escalation clause I will let them have it. I do not want them to do the best & final only to be way out of the park. I also do not want to not use the clause and they lose the house by $1,000 they were willing to pay over the closing price.

Whatever they feel comfortable with is what I would have them go with.

I would present the offer as the listing agent requests.... the buyers highest and best offer. 

  Offer their highest and best.  

   There are lots of houses for sale in Tallahassee in every price range.  If the Seller doesn't counter, we can move on to the next one.

In here escalation clause often interprets buyer is not serious. It is not $1K or $5K that makes the difference. Often accepted offer is way way way over what your client can afford or a clean offer.  No loan, no inspection, remove all the contigiencies at the time of making an offer. Free rent back. 

Escalation clause can be one way of getting to the best and final, sellers may disagree though. 

The escalation clause is fraught with abuse unless you structure it correctly; best offer period.

Our Brokerage does not accept escalation clause.

As a listing agent, i am frustrated when buyer agents are asked for highets and best and play games like that. Often that buyer will not be getting their offer accepted. It is not always price but contingencies, inspections, closing date and type of mortgage vs cash

If the seller has indicated how they want to receive offers, I suggest you follow those instructions if you want a chance of getting the property. What's so complicated about best and final? The buyer needs to put his money where his mouth is. I've represented sellers who have decided on a strategy to evaluate multiple offers and when they receive offers that don't fall in line, they tend to toss those offers into the reject pile.

Agents in Texas are not allowed to write an escalation clause; therefore, I would tell them to speak to a real estate attorney.

The “escalation clause” in not often used in our market. I have never used one. I am not sure that I have ever been on the receiving end of one…in 20 + years.

Isn’t “highest and best” the max that an escalation clause would offer? Why would a seller not automatically counter to the top of an escalation clause. The buyer has stated that they are willing to pay that amount. So…write that up as highest and best.

I generally explain stragies to buyers and let them make the decision. But in a competitive market price isn't always what the seller is looking for

Follow directions while explaining to your buyer. Highest and best is highest and best having an escalation clause indicates highest and best was not presented.

Since my market is so limited by appraised values I would suggest submitting the best offer the first time.

I agree with Michael Jacobs 

All things are "negotiable" in real estate and so I would do my best to consult and advise my buyer on all the options and then let them make the decision based upon the knowledge they were given.

Submit their best offer and go from there.

I would advise that I will talk with the listing agent.  An escalation clause could knock a buyer out of the running because not all agents understand them or know how to use them effectively. I would then make my recommendation based upon my discussion with the listing agent. Much the same as Debe Maxwell, CRS would do.

Plenty of Good Answers Here, I Perfer Seeing what My Buyer can do that the Seller "Needs" or "appreciates", No Contingenices, Maybe Rent back for short Period of time .... they have a value but not on the sales price

Offer highest and best based upon the comps! Then roll the dice and be prepared to move to the next table!

If there isn't another offer I would ignore the listing agents giant ego.

If there was one, I'd use the clause. Object being you want to win or what?

Submit the best offer your buyer can do.

Funny you should ask as I just had this happen to us!!!

This house went on the market on Friday and the listing instructions and follow up phone call verified that all offers should be highest and best and they would be presented to the seller at noon on Monday.  From talking with the listing agent I  knew that three offers were already in by Saturday morning( I predicted nine total offers-LA said 13 came in by presentation time) and advised my buyer this would be a great opportunity to use our escalation clause.  The listing agent has great integrity so I trusted her to handle everything in an ethical manner.  I explained the pros and cons of the escalation clause and the buyer wanted to use it.  It got us the house just $250 over the best net offer and yet was $6,000 under the maximum cap. 

The escalation clause is a great tool as long as the buyer understands the pros and cons.   The ultimate decision belongs to the buyer if the seller/and or listing agent do not respect the terms of the addendum, and disregard the final escalation price and go to the cap.

If the buyer submitted his gut feeling offer he would have lost the house.  By using the escalation clause he got the house but did not pay the additional $6,000 up to his cap.  It worked well for the buyer!  He was very happy!   

You obviously are not in real estate otherwise you woul;d be talking to a broker.

Submit your best offer.

Call the listing agent and ask

Many great responses.

No escalation clause.

Here, escalation clauses don't mean much. There is no requirement that the seller has to accept the highest offer price. Submit best offer, and don't waste a lot of time on an escalation clause.

I don't think I'd chase that one.  People already feel they pay too much, and I'm pretty sure they think they will too.

If their interest is limited then use the escalation clause. If they truly want the home then they'll need to put in their best offer and hope that it is.

I like Debe Maxwell, CRS answer....

I agree with Debe, some don't like them.   Best of luck.

A call to the listing agent would be in order

I prefer the escalation clause - however, if the listing agent insisted on the highest and the best, write that way.