48 Hour Notices on Real Estate Offers
Sometimes sellers receive an offer from someone with the condition that they they must sell their existing home by a certain date. They may wonder if they should to using a 48 hour clause saying that they accept the offer but can give the buyers notice to remove their conditions within 48 hours of receiving notice to do so or else their offer will be terminated and the sellers can proceed with the new one. If you are selling and contemplating using this, keep the following in mind:
Only Use a 48 Hour Clause Extremely Sparingly ... If at All
If you decide to accept an offer with the condition that the buyers sell their own home by a certain date, your condition will probably be outstanding for a long time. It could prevent you from selling to someone who is ready to buy with conditions that can be cleared more quickly. Therefore if you do decide to do that, make sure you use a 48 hour clause such as the one on my website. If you do that, be prepared to accept that it will create extra complications in your sale process so my suggestion is to only do it if you think it is otherwise an extremely strong offer that is unlikely to be matched any time soon. Also be confident that the buyers will be able to clear all their other conditions without any problem. If, for example, you aren't convinced they will be able to get a mortgage easily once their existing home sells, then don't get involved is my advice. Trust your instincts. If you don't have a good feeling about the first buyers in all other aspects, don't get involved. That's because if you get an offer from someone else, it does mean extra run-around for you and you certainly will not want more than 1 such 24 hour clause to juggle.
If you have a 48 hour clause and then another buyer comes to you with an offer you would like to accept, you have to find the first people to give them their 48 hour notice. Hopefully they are not away on holidays. It's best to personally give a notice to them telling them they have 48 hours to remove the condition. If the first buyers are unavailable ... perhaps they are away on holidays and can't be reached, you might lose the offer you are wanting to accept.
The new buyers may be a bit nervous knowing that they have to wait to hear if their offer can proceed ... given the requirement to provide notice to the first buyers. Remember that it may take more than 48 hours. The 48 hours only runs from the time you actually give them notice.
If you are the buyer and want to use this type of clause ... how will you feel if a week or a month later you see a different property that you would prefer to buy instead. Did you enter the offer with the 48 hour clause too quickly?
Remember that if you are also wanting to buy a new home your bank may need you to have unconditionally sold your home before you qualify for financing on your new purchase. An offer with these types of conditions is far from unconditional. Some people have very high incomes and very low debt so they may qualify to carry 2 mortgages at the same time, but most people do not. Your goal is to sell your home at a reasonable price in reasonable time so that you can buy the new home that you want to move into. If you haven't been receiving offers on the house you are selling, ask yourself if there is something about the price or the property that is making it more difficult to sell. If it is purely market conditions, that may be beyond your control but if you need to adjust your price or make a few improvements, that may help you get a buyer without needing to resort to these conditions. If you have already accepted an offer with a 48 hour clause, you now have little incentive to make improvements because the first buyer may come through and will get the benefit without compensation ... or they may object to how you have altered your property.
As you can see, you should only use a 48 hour clause sparingly on an extremely strong offer when you feel you are not going to be getting any other acceptable offers for a long time. Remember that use of these clauses are the exception ... not the norm.
Notice: The information on this website is general in
nature only. It relates to Saskatchewan, Canada and may not be
applicable in your jurisdiction. It does not constitute legal
advice to you and no solicitor client relationship will be established.
You should seek specific legal advice regarding your circumstances
from a lawyer entitled to practise law in your jurisdiction.
www.rickcarlson.com | Wed, 21 Mar 2018 03:47:33 CDT1
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