Timing Clauses Stop Sellers From Inciting Bidding Wars
By Raynor James, Fri Dec 9th

It is no secret that the current real estate market is hot, hot,hot. Sellers can receive multiple bids for their property on thesame day. In the rush of the moment, your emotions can carry youinto a bidding war. Using timing clauses can help avoid such asituation and protect you from buyer's remorse.

Timing Clauses - Drop Dead!

A timing clause is inserted in an offer to avoid open-endedbidding wars.



You do not want your offer to be "on the table"indefinitely. Such a situation inevitably leads to a bidding warwhere sellers "auction" up the price of home to a sellersbenefit. To avoid this, you should choose to put a "drop deaddate" on your offer. You would include language that sayssomething like, "This offer is open until withdrawn or until9:00 P.M. on Tuesday, June ____, 20__, whichever comes first."

Let's look at an example of how a hypothetical situation mightwork 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 August29, 2005, the seller informs you of a competing bid for$1,000,000. While your immediate reaction is to panic and upyour offer, you should instead calmly ask to see the competingoffer. If the seller drags their feet or won't produce it, thebluff is called. Now the seller has to make up their mind beforethe 1st. They may decide not to accept your offer, but at leastyou will have avoided bidding against yourself. Alternatively,if the seller produces a competitive bid, you will know whereyou stand and make an informed decision on whether to raise yourbid.

Timing clauses are fairly standard practice in most parts of thecountry. Make sure you use one to force the seller to make adecision. You don't want to be left twisting in the wind.

About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.

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