Mastering the 72-Hour Clause in Real Estate Deals
The 72-hour clause, also known as a release clause, is an essential component frequently included in sales contracts by sellers. This clause allows sellers the flexibility to keep the property on the market and entertain backup offers even while under contract with a potential buyer.
How the 72-Hour Clause Works§
When a buyer enters a contract contingent on selling their current home, the 72-hour clause can significantly impact the dynamics of the transaction. Here’s how it unfolds:
- Contingent Contract: The buyer’s offer is accepted contingent upon the sale of their existing home.
- Backup Offers: The seller continues to market the home and can accept backup offers from other interested parties.
- Better Offer Received: If the seller receives a superior offer from another buyer, they can activate the 72-hour clause.
- Immediate Decision: The original buyer has 72 hours to either proceed with the purchase (despite not selling their current home) or withdraw, voiding the contract.
Negotiable Timeframes and Notifications§
While 72 hours is the standard timeframe, the period can be negotiated to better suit the needs of both parties. Crucially, the seller must provide advanced notice to the original buyer before invoking the clause and canceling the agreement.
Buyer’s Perspective§
For buyers, the 72-hour clause can add pressure to collate finances rapidly or risk losing the property. An understanding of this clause can foster more informed decision-making and better preparation for potential complications.
Seller’s Advantage§
On the flip side, sellers gain a strategic advantage. This clause ensures that sellers aren’t left in a bind waiting indefinitely on the buyer to sell their previous home; they have the freedom to capitalize on preferable offers swiftly.
The 72-hour clause ultimately fosters a dynamic interplay between the buyer and seller, aiming to balance flexibility and commitment within the ever-competitive real estate landscape.
Related Terms: Escrow Period, Contingent Offers, Real Estate Negotiation, Seller’s Market, Kick-Out Clause.
