Sunset clauses

[Stella]

While I understand this clause provides the vendor with a method to make us go uncond. or let sale fall thru if they get better offer, is there any way we can either get agent to omit this clause (said he wouldnt encourage vendor to accept our offer without it) or get it to work for us too?

If vendor has higher/better offer we will have 7 days to decide to go uncond. or let sale fall thru.
Contract is also subject to satisfactory contract & settlement of our PPOR & the usual building/pest & finance. Cant see us having a problem selling our PPOR but I like to consider all options & haven't had a 'sunset clause' in a contract previously.

Atm the vendor hasnt accepted our offer & my partner hasnt signed the contract so this is a theoretical question really.

What are the general thoughts about this clause?

Cheers
Stella

 

[Stella]

Interesting - no good,bad or indifferent comments?

Surely people have thoughts on the use of this clause & what it means to both the vendor & the seller.....


Cheers
Stella

 

[Perp]

I don't think anybody's replied because it's pretty straightforward, Stella. It's a clause that really only benefits the vendor, but I can see why the vendor would want it, particularly since the contract is subject to sale of your PPOR.

Obviously the risk to you is that they'll get a better offer and you'll lose the property, but if you want it, and you say you're confident of selling your PPOR, then I think you should sign. Good luck!

 

[Ms Jade]

I've never heard of a sunset clause. I assumed that if a conditional offer did not meet the conditions within the specified time frame that the buyer would need to either change to unconditional or ask for a time extension. Without this clause, doers this mean that a vendor is tied into the offer if the time for building inspection etc lapses?

 

[Perp]

Without this clause, doers this mean that a vendor is tied into the offer if the time for building inspection etc lapses?

No, I think you've misunderstood the purpose. It's an escape clause for the vendor, to protect the vendor from missing out on offers from other buyers while waiting for the purchaser to sell their PPOR. The purchaser still has to advise satisfaction of the various conditions as the deadlines occur.

So Stella signs to buy, subject to sale of PPOR within, say, 60 days. If the vendor has somebody else come and make an offer to purchase at the 30 day mark, they go back to Stella and say "you either have to go unconditional - ie waive the 'subject to sale of PPOR' clause - or we'll void the contract and accept the other offer".

Without the sunset clause, the vendor is stuck with Stella's offer until Stella either completes, or pulls out after 60 days due to not selling the PPOR. The latter would obviously leave the vendor disadvantaged by having accepted Stella's offer.

 

[Ms Jade]

Aah, that makes sense. Good to know, thanks!

 

[Stella]

I don't think anybody's replied because it's pretty straightforward, Stella. It's a clause that really only benefits the vendor,

Obviously the risk to you is that they'll get a better offer and you'll lose the property, but if you want it, and you say you're confident of selling your PPOR, then I think you should sign. Good luck!

Thanks - thats probably all I was after - confirmation that the clause means what I thought it did & there were no hidden nasties lurking that I was unaware of not having seen this clause before.

Vendor has now listed with another agent who has an open on Saturday so vendor doesnt want to commit to our offer until after the weekend now anyway so who knows what will happen come Monday!
Cheers
Stella

 

[David E-Noosa]

Ozperp is absolutely correct.

But there is more and often missed by people as you must remember the agent is working for their client, their client is the seller in this case.

What happens in real life is you enter into the contract with a sunset clause as per the explanation. This is done generally because you the buyer are unable to buy the property at that time but want to hold it. You are not in a very good bargaining position so generally you pay a higher price.

This brings in two things many people miss.

You being in a less than ideal bargaining position have paid a higher price, the chances of the seller getting a better price is harder.

It also makes the property harder to sell because it is not a straight up sale for the next buyer. They must make their offer and hope you fail to proceed. In the mean time they may miss out on another property.

So is it really bad for a buyer ?
Is it really the best thing for a seller ?

Bit of each I think. The seller has a buyer and you have a place to set your sights on owning. Many people are not keen to commit to selling when they don't know where they are moving to, mainly the elder people.

 

[Stella]

Many people are not keen to commit to selling when they don't know where they are moving to, mainly the elder people.

This is exactly our concern, after having looked off & on for at least the last 18mths (few weeks at a time here & there) and not finding anything. Our concern is that if we sell before we find a new place we will have to move & rent while we keep looking.

Not an ideal situation but I'm not much of a gambler & like to plan.

We have offered a bit more than I think the place is worth because, as my partner pointed out, it has everything we have been looking for. I figure as a long term hold (& long term peace & quiet from partner ) it will pay off in the long run.

Cheers
Stella

 

[David E-Noosa]

We have offered a bit more than I think the place is worth because, as my partner pointed out, it has everything we have been looking for. I figure as a long term hold (& long term peace & quiet from partner ) it will pay off in the long run.

Stella in the long term I would most likely do the same thing if its my PPR, makes almost no difference in payments but a world of difference having what you want.

 

[Dazz]

Interesting - no good,bad or indifferent comments?

Surely people have thoughts on the use of this clause & what it means to both the vendor & the seller.....


Cheers
Stella

Stella, I think they will both be in 100% agreement. No need for the clause at all in this case.

 

[Stella]

Stella, I think they will both be in 100% agreement. No need for the clause at all in this case.

LOL - oops got me there - yes I agree they should be both in agreeance!

Moot point now however (for this sale anyway) as partner went to the open today to have another drool & found some little uninvited pests in the garage. Offer has been withdrawn & the search continues.......

Cheers
Stella