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Article source: http://www.articlealley.com/. Used with authors permission.
It is no secret that the current real estate market is hot, hot, hot. Sellers can receive multiple bids for their property on the same day. In the rush of the moment, your emotions can carry you into a bidding war. Using timing clauses can help avoid such a situation and protect you from buyers remorse.
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 You would include language that says something like, This offer is open until withdrawn or until 9:00 P.M. on Tuesday, June ____, 20__, whichever comes first.
Lets 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 wont 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 dont want to be left twisting in the wind. Raynor James is with http://www.fsboamerica.org - providing FSBO homes for sale by owner. Visit our sell my home? page at http://www.fsboamerica.org/seller.cfm to list and sell your home for free for one month. Visit http://www.fsboamerica.org/buyer.cfm to see homes for sale by owner.
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