Discovering an 'Under Offer' status on your dream property can be disheartening as it implies that the potential buyer hasn't yet met all the necessary purchasing conditions. Here's a breakdown of the
72-hour clause and whether it's worthwhile to submit an offer in such situations.
Essentially, the 72-hour clause is designed to expedite the home selling process,
favouring the seller. When a buyer makes an offer to purchase real estate and the seller accepts and signs it, it becomes a legally binding contract for both parties. However, there are instances when an offer can be revoked after signing, making room for alternative offers from other potential buyers.
In most cases, a sales agreement is subject to what's known as 'suspensive conditions,' which delay the contractual obligations until an uncertain future event occurs. Two common examples of suspensive conditions in sales agreements are:
1. When the sale is contingent upon the buyer successfully selling their own property.
2. When the sale depends on the buyer obtaining financing from a financial institution within a specified timeframe.
In both scenarios, there's a waiting period during which the seller is potentially missing out on offers without these suspensive conditions. To address this issue, many purchase offers include a 72-hour Ratification clause or a
Continuing Marketing clause.
These clauses allow the seller to continue marketing the property until the suspensive conditions are met. If the seller receives an offer from a second buyer that doesn't have suspensive conditions (such as a cash offer), the seller can then notify the first buyer, giving them 72 hours to either waive or provide proof of meeting the suspensive condition(s).
If the first buyer cannot do so within 72 hours, the seller has the right to cancel the agreement and accept the offer from the second buyer. This highlights the importance of not hesitating to explore deals that are already 'under offer.' Each sale agreement has its unique circumstances, and competitive offers may still be possible.