48 Hour Clause
A 48 hour clause can be added to a real estate contract by the seller when the seller hopes for a higher price than the one on the table. The seller wants to keep their options open to see if better offers come in. It pushes the buyer to work through their conditions as prudently and quickly as possible.
The benefits of using a 48 hour clause
It allows the seller to continue marketing their home, even lowering the price on the MLS in hopes of triggering a bidding war. If higher offers come in while the conditions from the first buyer are being worked through, the original buyer has 48 hours to remove their conditions and close on the deal.
A 48 hour clause can be completely warranted when there has been a flurry of activity on the listing and the seller chooses the better price but they aren't 100% confident that they will be able to close with the chosen buyer. It also can be a good idea to use this escape clause when a buyer puts in an offer subject to their own home selling.
The risks of using a 48 hour clause
A 48-hour clause is a tentatively accepted offer, it's completely in the seller's right to try and improve their position, but it can also alienate the only buyer that they currently have. The old adage of a bird in the hand is better than two in the brush might be a wise way to think of it when the listing has not seen much activity and it is sitting around the 60 day mark.
What to do as a buyer
If one of our client's offers comes back with a 48 hour clause and the seller is convinced they will suddenly get a better offer, it's not our job to argue. It is our job to pivot and adapt our acquiring strategy.
It's smart to always anticipate a 48 hour clause and we schedule the offer pre-emptively because timing is everything.
We request the 48 hour clause notice to be extended to a 72 hours notice, that extra day can make or break a sale.
Work with our clients that they have their financing ready to go, a good mortgage broker has ways of pre-approving loans.
Be there for the home inspection, don't wait for the official report, walk with the inspector and take notes. If they cannot find any glaring issues at the end of the inspection, remove that condition as quickly as you feel comfortable.
Why agents use this clause often
Real estate agents use the 48 hour clause to keep a property’s MLS status active rather than changing it to pending. If a deal falls through and a home goes from pending back to active, buyers and agents sometimes assume it failed a home inspection, and that can create a negative market stigma around the property. By keeping the listing active during the conditional period, the agent saves the listing from unnecessary negative publicity.
If you are looking to buy a home in a popular area, or you are simply looking for a great deal, we can help you succeed using best practice negotiations. In today's market, it pays to have an agency that stays ahead of the game and above the fray.
DISCLAIMER: This article is written for informational purposes only and does not constitute legal advice. The views expressed are solely the author’s and should not be attributed to any other party or to the author or company.
Real Estate Buyer Specialist: This guide is maintained by Albertine Huizing, a licensed REALTOR® with Magnolia Group at First Place Realty. Specializing in historic inner-city Calgary character homes and preserving Calgary's vibrant communities. Providing a personalized experience is my priority, all client consultations and private home viewings are arranged exclusively by appointment. Please call or text +1 403-471-7587 to connect directly. Registered brokerage office address: 1822 10 Ave SW #305, Calgary, AB T3C 0J8.
