Tuesday Jan 12 2010
The Real McCoy: Couple seeks guidance after losing their dream home
By: Kari McCoy
Dear Kari, My wife and I made an offer on our dream home and this is our second time buying a home. Of course we must sell our current home to qualify for the new house. As soon as our dream home hit the market, we called the Realtor and made an offer. At the time there weren’t any other offers and the listing agent said the sellers signed our offer and we were in contract. We were so excited! Then before we knew what happened, the agent said that another offer had come in and the sellers like the other offer better because it is for more money. Is there anything we can do? Answer: This sounds like there may have been a 72-hour release clause placed into the purchase contract. This is a clause that is used in creative ways to help the process of buying and selling homes and may be confusing. The 72-hour release clause is inserted into a purchase contract in writing upfront and becomes binding. This clause allows one party to withdraw under certain conditions, and will also have a specific time frame spelled out. This is also known as a kick-out clause, release clause or escape clause and can become confusing to buyers and sellers. One example is offering permission for the buyer to sell their current house before purchasing the new home, with the precondition of the 72-hour specified deadline. In this situation it is referring to a contingent sales contract, where the seller is waiting for the buyer to sell their property before they pursue the next one. Repeat buyers, that are unlike most first-time homebuyers, usually need to first sell their existing home in order to purchase the next home. Some of these repeat buyers sell their home first and then buy the next home, yet some of these buyers are too concerned because of some of the uncertainties such as kitchen upgrades, larger yards or because they are too attached to their current home. These are the people that would just prefer to stay in their homes until they find the next one. This clause is designed additionally to protect the seller from losing valuable marketing time during the real estate negotiation period. If the buyers have a house on the market or are going to put their house on the market, during this time the seller is committed to the buyers’ contract yet reserves the right to accept a better offer should one be presented. If this is the case, the seller must give the first buyer 72 hours to commit to the purchase or allow the second offer to prevail. These are hard decisions to make and there are risk-reward scenarios for all parties, boiling down to the dynamics of your market, reliability of the purchaser and the help of the professional Realtor. These methods have helped several buyers and sellers and have also frustrated many too. Kari McCoy has been a Realtor for 25 years and owns the Kari McCoy Group, Residential Real Estate, at Coldwell Banker. She can be reached at 941-9540, firstname.lastname@example.org or at karimccoy.com.