I just bought a property below market value but had to include a "subject to sale" clause aka sunset clause. the agent tells me they are continuing to market the property. Clause states that if a better offer comes along I have 3 days to decide if I want to match the offer and go unconditional.
Does this actually happen?
Are they allowed to market the property without telling people its under contract?
my mortgage broker suggests that the agent probably wont waste time finding other buyers for an extra $250 commission, and the new buyers are unlikely to be unconditional, so she thinks its very unlikely to happen.
how often DOES it happen?
Hi Crashy,
With the current state of the market (Demand exceeds Supply), I am wondering why any Agent would advise their Vendor to accept a contract with a Sunset Clause. It leads me to believe that the Property in question is not in a fast growth area.
While they are not common, they are often used in conjunction with a 'Subject to sale clause'. The reasoning here is that the Vendor is giving the Purchaser the opportunity to purchase the property but also placing some pressure on the Purchaser to sell their property as quickly as possible. When I have done this type of contract, I would always have wanted to see the Purchasers property that had to be sold and calculate if the Selling price that they wanted was reasonable. If it was, I could in all honesty advise my Vendor of the risk involved. I would also want to be involved in the sale if possible, this way it is a win win for everyone and in my best interest to work hard to make it happen.
The fact that you signed the contract with the Sunset Clause condition, gives the Seller the right to continue to market the property, the Agent however is obliged to advise that the property has a contract with a Sunset Clause on it . It is quite common that there will be another buyer who may place an offer with better conditions. People are funny that way, when they see someone offer a figure it sets the value in their mind and the new buyer is often prepared to offer more – This is why the Auction system works. As I have stated here before, I can't count the number of people who phone after an auction just to tell us that they would have paid more than the auction result – yeah, right!I believe that the real lesson here for everyone is that it is always difficult to purchase Property when you still have one to sell. The smart person will sell their home first and give themselves a better platform to negotiate the new purchase from.
Jon
Hello we have just seen a property which we are very interested in purchasing but we would need to sell our home first (we are downsizing)
The agent suggested we sign a 30 day sunset clause re. sale of our property, she would also like to view our property and sell it for us.
Can anyone tell me please the pros and cons of signing a sunset clause re the selling of our property and is it wise to let the same agent sell your home as well as the one which we are interested in purchasing.
Many Thanks in advance for any help
Regards
Anne
By allowing the same agent to sell your house as the one you have purchased, you are giving the agent more power over you in the sale – ie they can put more pressure on you to accept a lower price so that they not only close your sale but prevent the other one falling over so that they collect both lots of commission.
Generally a vendor will not allow a purchaser to insert a sunset clause without a penalty. This is because they have spent money on marketing, attracted several buyers etc but will have lost the momentum should an event outside of their control cause the contract to fail. This is an unacceptable risk which would not be accepted.
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