The 72-Hour Clause Explained
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The 72-Hour Clause Explained When Buying Property
The 72-hour clause, sometimes referred to as 'continued marketing clause', must be explained to potential home buyers and sellers as it can often cause misunderstandings between the parties, especially first-timers. We share where it originated, the various benefits for both seller and buyer, and more.
Where did the 72-Hour Clause Originate?
In the past, an offer to purchase was dependant on the sale of the buyer's existing property. Once the seller accepted the offer to purchase, they removed the property from the market for a specific period, reserving the sale to the interested party. However, this was a time-consuming and risky process for the seller, which is why the 72-hour clause came into play.
The 72-Hour Clause Explained
The 72-hour clause protects the seller from missing out on a sale by enabling them to continue marketing the property. However, if the seller gets another unconditional offer, they must first give the original interested party a written notification that allows them 72 hours to remove the suspensive conditions. Alternatively, the buyer would have to back out of the deal.
What Does Suspensive Conditions Mean?
When someone wants to sell property, they can have specific suspensive conditions. They are also able to ask the buyer to comply with these conditions. These suspensive conditions mean that something must happen for the clause to be legally binding.
What are the Benefits?
The 72-hour clause serves as a win-win agreement for both the seller and the buyer. It helps to protect the interested buyer from making a financial commitment they cannot honour. On the other hand, it also gives the seller flexibility to continue marketing the property. This provides the seller with bargaining power to know within 72 hours whether the unconditional offer has been accepted or not, which ultimately reduces the risk of losing an unconditional buyer. It also speeds up the sale while giving both parties an element of peace of mind.
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Author: Tyson Properties
