Timing Clauses Stop Sellers From Inciting Bidding Wars
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Timing Clauses: Preventing Bidding Wars in Real Estate
The real estate market is currently sizzling, with sellers often receiving multiple bids for their properties in a single day. In such a high-pressure environment, it's easy to get swept up in a bidding war driven by emotion. However, using timing clauses in your offers can help you avoid this situation and protect yourself from buyer's remorse.
Understanding Timing Clauses
A timing clause is a strategic component in an offer designed to prevent open-ended bidding wars. You don't want your offer hanging indefinitely, as this can lead sellers to drive up the price to their advantage. By including a "drop dead" date in your offer, you establish a clear deadline. For example, you might write: "This offer is open until withdrawn or until 9:00 P.M. on Tuesday, June ___, 20__, whichever comes first."
How Timing Clauses Work
Let's explore a hypothetical scenario. Imagine a home is listed at $995,000. You offer the full asking price with a drop dead date of September 1, 2005. On August 29, the seller informs you of a competing bid of $1,000,000. Instead of panicking and raising your offer immediately, calmly request to see the competing bid. If the seller hesitates or fails to provide it, you’ve likely called their bluff. This forces the seller to make a decision by the deadline. While they might not accept your offer, at least you won't be bidding against yourself. On the other hand, if the competing bid is legitimate, you can decide whether to raise your offer based on actual information.
The Standard Practice of Timing Clauses
Timing clauses are quite standard in many areas. Utilizing one compels the seller to make a decision, ensuring you're not left in limbo. Don't let yourself be caught up in an indefinite bidding process?"use timing clauses to keep the process clear and fair.
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