What Is a Unset Clause & How Can It Benefit You?
So, you have made the decision that it’s time to move on to a new home. You might be downsizing, upsizing or moving locations.
With any of these scenarios the question is still the same –
Do I buy first or sell first?
It is always tricky to work out what is the best path moving forward with both selling your property & purchasing a new one.
Do you take the risk of being homeless for a period of time or bite the bullet and look into bridging/relocation finance?
There is however another option that isn’t always covered by your real estate agent in this situation.
You can make your offer subject to sale and include a “sunset clause”.
The sunset clause is a special condition that can be inserted into a contract when you are making an offer that is subject to the sale of your existing property.
This works to benefit both you the purchaser & the vendor;
Not too many sellers will be excited about taking their property of the market for a period of time whilst you try and hopefully secure a contract on your home. The seller’s fear is they miss an opportunity with another buyer. This could result in the seller rejecting your offer no matter how appealing it may be.
A sunset clause will allow the seller to continue to market their property in the hope of securing another buyer while you are going through the process of securing a contract on your existing property.
So this is how it benefits the Seller, how does it benefit you?
A sunset clause will give the seller the reassurance they won’t miss any opportunities to sell their home whilst giving you the opportunity to sell your home without the risk of having to own two homes.
Put simply, while you are trying to secure a contract on your property if the seller does find another buyer you will be given notice to complete the contract or terminate the contract.
A correctly put together sunset clause will allow this to happen
Both the subject to sale clause and sunset clause should have very clear timeframes and the outcome if those timeframes are reached.
If the situation is reversed and you are selling and your agent brings you a subject to sale offer you would want to ensure there is a well-prepared sunset clause in the contract.
A sunset clause is a great option for both buyer and seller, there are some important factors to be considered when looking at this option. It is always best to seek legal advice before entering into any contract, a well experienced agent should be able to guide you through the pros and cons of this situation.
If you would like anymore information, or to discuss this topic further, please do not hesitate to give me a call today on 0401 009 197.