Understanding the “72-hour clause” in the offer to purchase
When your buyer is a homeowner wanting to buy a new home, that buyer will make the offer to purchase conditional on the sale of their existing property. It’s important to understand that, as long as the conditions of that offer aren’t met, you can keep looking for a new buyer.
“So, while the buyer is trying to sell their property within the timeframe given in the offer to purchase, the seller can receive and even accept a second offer to purchase,” explains Elena Maria Bejan, a notary with DuProprio. “The recommended amount of time to allow the buyer to sell their existing property is usually between 60 and 90 days, but the parties can absolutely agree on a shorter or longer timeframe, depending on the particulars of the situation.”
What happens if you receive a 2nd offer?
If a new buyer submits an offer to purchase for your property, this second offer is independent of the first one, but it must be conditional upon the cancellation of that first offer of to purchase.
If all the conditions of the second offer are met before the conditions of the first one are, then you must send the first buyer a 72-hour notice.
Sending the 72-hour notice
The 72-hour notice can be sent to the first buyer by any method that provides a proof of receipt, for instance delivery in person (obtaining the buyer’s signature with the precise date and time), by a bailiff of by telegram. Starting from the time the notice is received, the buyer has 72 hours to advise you in writing of their decision.
The first buyer has two options:
- Cancel all the conditions in the offer to purchase that haven’t yet been met, including the condition that the existing property be sold, and demonstrate that the financing or funds needed to buy your property are available; or
- Cancel the offer to purchase.
If the buyer does not advise you of a decision within the 72-hour period, that buyer’s offer to purchase becomes null and void.
Finalizing the transaction
Regardless of which of the two offers you end up accepting, we recommend that you fill out Section 3 of the form Amendments and Notice of Fulfilment of Conditions . It will officialise the offer to purchase before you go meet the notary.