"It has often been misunderstood and this has caused problems," says Lanice Steward, managing director of Anne Porter Knight Frank (APKF).
Traditionally, when an offer to purchase a home was made it was subject to the sale of the buyer's existing property. If the seller then accepted the offer, he had to remove his property from the market for an agreed period. This could be as much as six to eight weeks while the buyer battled to sell his own home.
A delay of this length, said Steward, will obviously be detrimental to the seller's marketing effort and could cause him to lose out on another offer.
The 72 hour clause solves this difficulty because when it comes into operation the seller is allowed to continue to market his property. If he then receives another unconditional offer (i.e. not subject to the sale of another house) he has to present the first buyer with a written notification giving him 72 hours in which to remove his suspensive conditions or back off from the deal.
"This clause creates a win-win situation for both the buyer and the seller. Obviously it will speed up the sale but, equally important, it does away with the irksome situation where the potential buyer finally sells his home then contacts the agent to say he can now confirm his offer only to find that the home has been sold."
The 72 hour period can be increased or decreased – it is not "cast in stone". She warned, however, that sellers in a hurry for a decision should not fall into the trap of allowing the period specified to exclude Saturdays, Sundays and public holidays. These, she said, can extend the holding period to five days, which might be too long for a keen buyer with a better counteroffer.
For more information contact Lanice Steward on 021 671 9120 or send an email.
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