Discover the ins and outs of the 72-hour clause and whether it’s worth pursuing an offer when you see that coveted “Under Offer” notification on your dream property.
The 72-hour clause serves as a means to expedite the sale of a house and is particularly advantageous for sellers.
Once a purchaser submits an offer to purchase a property and it is accepted and signed by the seller, it becomes a legally binding contract for both parties. However, there are instances where an offer may be canceled after signing, opening the door for alternative offers from other potential buyers.
In most cases, sales agreements are subject to what is known as suspensive conditions. These conditions suspend the contractual obligations until the occurrence of an uncertain future event.
Two common examples of suspensive conditions in sales agreements are:
A condition where the sale is contingent on the purchaser successfully selling their own property.
A condition where the sale is dependent on the purchaser obtaining financing from a financial institution within a specified timeframe.
During the period when these conditions are being fulfilled, the seller may face delays and potentially miss out on other offers that don’t have such conditions.
To address this concern, many offers to purchase include a 72-hour Ratification clause or a Continuing Marketing clause.
Here’s how it works: The clause allows the seller to continue marketing the property, even on platforms like Property24, until the suspensive conditions are met. If the seller receives an offer from a second buyer that doesn’t have any suspensive conditions (such as a cash offer), the seller can provide the first buyer with written notice, granting them 72 hours to either waive (abandon) the conditions or prove their fulfillment.
If the first buyer is unable to do so within the specified timeframe, the seller is entitled to cancel the agreement and accept the offer from the second buyer.
It’s essential for interested purchasers not to dismiss deals simply because a property is already under offer. Each sale agreement presents its own unique circumstances, which may create opportunities for competitive offers.
Stay informed and proactive in your property search, as you never know what possibilities may arise.
