Timing Clauses ? Drop Dead!

A timing clause is inserted in an offer to avoid open-ended bidding wars. You do not want your offer to be ?on the table? indefinitely. Such a situation inevitably leads to a bidding war where sellers ?auction? up the price of home to a sellers benefit. To avoid this, you should choose to put a ?drop dead date? on your offer. You would include language that says something like, ?This offer is open until withdrawn or until 9:00 P.M. on Tuesday, June ____, 20__, whichever comes first.?

Let?s look at an example of how a hypothetical situation might work out.

Say the asking price of the home is $995,000. Your offer is $995,000 with a drop dead date of September 1, 2005. On August 29, 2005, the seller informs you of a competing bid for $1,000,000. While your immediate reaction is to panic and up your offer, you should instead calmly ask to see the competing offer. If the seller drags their feet or won?t produce it, the bluff is called. Now the seller has to make up their mind before the 1st. They may decide not to accept your offer, but at least you will have avoided bidding against yourself. Alternatively, if the seller produces a competitive bid, you will know where you stand and make an informed decision on whether to raise your bid.

Timing clauses are fairly standard practice in most parts of the country. Make sure you use one to force the seller to make a decision. You don?t want to be left twisting in the wind.

Posted by Susan Phillips on December 13, 2008 at 12:00 AM

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Susan Phillips is affliated with United County Professional Realty, which is located in Tularosa, NM. For further assistance please use the contact information located on the right.




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