Buying and selling in the same time frame. What are the advantages and disadvantages of the ‘sale of buyer’s home’ condition?
The ‘sale of a buyers home’ clause in real estate is a more complex condition. In a nut shell we tried to pin-point 3 important facts in the first article about the sale of buyer’s home condition and explained those points more in detail in the second article about this condition.
Here are the 3 things you need to know about using this clause, whether you are a buyer or a seller:
- When you offer on a home with the condition ‘sale of buyer’s home’, your own home must be on the MLS within 24 or 48 hours.
- When a second buyer comes in, the seller can negotiate with this second buyer, and you will have to waive all your conditions within 24 or 48 hours.
- Sellers don’t have to disclose they have an accepted offer on the house, meaning that other buyers can put in an offer.
As mentioned, we tried to explain all three points more in-depth in part 2 of the sale of buyer’s home condition.
Our experiences with this ‘sale of buyer’s home clause
Well, in all fairness, we personally have no definitive reason why this is set up this way. And with ‘this’ we mean that a first buyer all of a sudden has only 24 or 48 hours to waive important conditions such as home inspection or financing. It is simply too risky for a buyer to waive too early. Think about those implications! However, it can also work out for buyers, but much will depend on where they are on the time line in the transaction. Did they need 6 more days for financing, or will they get the approval tomorrow? And all will also depend on the type of market we are in today. Is it a buyer’s market or a seller’s market?
Advantages and disadvantages for home sellers
We actually do see an advantage for a seller to accept this condition. A seller just may have leverage on a second possible buyer. This second buyer will have to come up with a better price if he wants the home, to trump the first buyer. Alternatively, a disadvantage may be that if the seller discloses he has an accepted offer with this condition, some potential buyers might walk away.
Having been in this situation several times, on both the buyer’s and seller’s side where this condition came into play, we learned several things to be able to work in both ways in our clients’ advantage. Many realtors are not aware of the rules. In one transaction, our buyers had the extreme luck that the selling realtor was not aware of the fact that the buyers had to waive all the conditions. This selling realtor received a better offer from a second set of buyers, on both price and possession date. He simply waited for our buyers until their financing and home inspection were fulfilled. Yes, this selling realtor failed to get more money out of the sale for his selling clients, by simply not knowing the rules.
The above is general information only. It is not meant to be legal advice upon which anyone may rely. If you have questions about a specific property or transaction, please speak to counsel for definitive advice.