It happens all of the time; the phone rings, and it’s a Buyer on the other end who has driven by a For Sale sign, is responding to an add in the Real Estate News, went to last weekends Open House, or was just perusing MLS looking for a new home. This particular Buyer has taken an interest in a particular home, and they are phoning to find out more information and to book a viewing. Unfortunately, they are phoning a tad on the late side, as this home has a ‘Sale Pending’.
What it Means;
Sale Pending means that the Seller has accepted a conditional offer. If the Buyer is able to satisfy their conditions within the agreed upon conditional timeframe, then the home will be ‘Sold Firm’. In Thunder Bay, conditional timeframes can range from just a few days to 10 days or longer depending on the conditions involved and the Buyers unique situation. Typical conditions can be financing, insurance, home inspections, water tests, septic inspections, ESA inspections, or sale of the purchasers home. The conditions included in an offer could include just a few of these, maybe even just one, or all of them, and even more. It all depends on the property being purchased in combination with the Buyers needs and concerns.
What it does not Mean;
Sale pending does not mean that the home is actually sold. However, nor does it mean that a new prospective Buyer can automatically submit an offer and ‘bump’ the conditionally accepted offer that is currently in place. It certainly doesn’t mean that the details of said accepted offer can be disclosed, and that means to anyone. One of the most important things to know, is that the conditionally accepted offer is subject to legally binding terms. The Buyer legally has the predetermined amount of time to satisfy their conditions without the risk of being bumped, unless there is an escape clause included within the conditions of the offer.
An Escape Clause- What’s that?
An escape clause is usually written into an offer when a Buyer needs extra time to meet their conditions. For instance, a Buyer may be submitting an offer conditional on the sale of their home, which, depending on local market conditions and many other factors, could be a lengthy process. The escape clause is of benefit and in the best interest of the Seller, who may not want to risk having their home tied up and off the market for an extended period of time while the Buyer attempts to satisfy their conditions. The escape clause allows for the Sellers Property to continue to be marketed and shown to other prospective Buyers who may be in a position to submit a superior offer. Typical escape clauses in our Thunder Bay Real Estate market are generally within the 24-78 hour range. Of course this is at the discretion of the Seller, their Real Estate Agent, and the Buyers and their Agent and can vary depending on many different circumstances.
What does that Mean for Me?
Well, essentially, if there was an escape clause in a conditionally accepted offer, and you were interested in the home and wanted to submit an offer of your own, you and your Real Estate Representative would meet to discuss and draft your offer. The offer would then be submitted to the Selling side, discussed, and if they accepted your offer, the offer that was currently in place would be served notice that they had the time period predetermined by their escape clause to either satisfy or remove their own conditions. Upon failure to remove their conditions within the escape clause timeframe, your offer would move into place and take precedence.
Moral of the Story;
Of course, the best way to avoid the stressfulness of finally discovering your potential dream home, only to find that there is a Sale Pending on it, is to source out a Real Estate Representative that you can relate to, and trust, and that you will enjoy working with. Ask around, talk to your friends, family, neighbours and find out who they’ve used and enjoyed working with. Take the time to meet with a few different Agents, and don’t be afraid to work with someone new to the business if they seem like a great fit! Thunder Bay has so many fantastic Real Estate Representatives and I can guarantee you that once you find the right one, finding your dream home will be so much easier!