What’s An Extra 90 Days Between Friends?
Recently I received an email from Josie who was taking a property to auction and was asked whether to set a 3 or 6 month (with a 10% deposit) settlement period.
(For those that don’t know, the settlement period is the time between signing a contract and settling on the purchase)
Here’s what I said…
“Hi Josie,
There are a number of answers to this question, as there are a number of perspectives in play.
The simplest thought is this: don’t let the tail wag the dog.
Keep your eyes on the prize (the sale), rather than the less significant terms (an extra 90 days).
That is, while there is a time cost of money in waiting an extra 90 days, is it really something to get worried about, especially if you hold a 10% deposit?
The more interested engaged buyers you have willing to bid at the auction, the better the likely sales price.”
The bigger concern with an auction is getting as many qualified buyer-reader bidders as possible to turn up and engage. If a potential buyer came along that needed an extra 90 days, so what?
I’d rather have an extra qualified buyer pushing up the price by possibly many thousands, than worry about the hundreds of dollars of lost interest waiting a few extra days.
Make good choices.
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