- The Offer to Purchase is a binding agreement and withdrawing will incur penalties.
- However, the seller has options available to them, such as the 72-hour clause.
- Examine the Offer to Purchase carefully and ensure you’re protected before signing.
The Offer to Purchase is a key stage in the buying or selling of a property. It’s important to understand this deal and its ramifications. Here we discuss what options the seller has if the buyer is slowing down the deal.
Note Use our Home Loan Calculators to prepare yourself for a home purchase. You can find out what you’re likely to pay on a home loan, transfer costs, and more.
Can you pull out of an Offer to Purchase?
The Offer to Purchase is a binding agreement and pulling out will incur penalties. The party that pulls out could potentially be sued.
The estate agent and conveyancing attorney can also claim full compensation for the time and resources wasted on the deal.
However, there are conditions under which the deal can be cancelled.
An Offer to Purchase can be cancelled if:
- The buyer fails to fulfill obligations stipulated in the Offer to Purchase.
- The buyer violates clauses included in the Offer to Purchase.
- The Offer to Purchase includes a designated deadline date that has passed.
The 72-hour clause: A seller’s best friend
The best option available to the seller is the 72-hour clause.
This allows the seller to keep marketing a property, and to accept a better offer if one is made.
The catch is that the seller has to give the buyer 72 hours to fulfill the terms of the deal before the new offer can be accepted.
If the buyer manages to fulfill their obligations within 72 hours, the seller cannot accept the new offer.
The lesson for sellers
The best recourse for sellers is to carefully examine the Offer to Purchase before signing it, and include terms that ensure the buyer can’t slow down the deal.
- Include a deadline date.
- Include clauses that protect you from a reluctant buyer.
- Ensure the 72-hour clause isn’t removed.
Of course, including too many terms and conditions may cause the buyer to withdraw their offer, but it’s better than being committed to a deal that ends up backfiring.
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