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More
about "Subject"
Clauses
The purpose of a subject clause
contained in an offer of purchase is to
set out a specific condition that must be
fulfilled before the sale can go through.
One common subject clause you might
encounter is one in which the purchasers
make the sale conditional upon their
finding the exact amount and type of
financing which will enable them to
purchase your home.
Remember that, if you accept an offer
that contains a subject clause, you are
effectively taking your property off the
market for the period in which the
purchasers are attempting to meet the
conditions they have set. Therefore, you
should ensure that an agreed upon time for
the condition to be met is specified in
the offer to purchase.
If one of the conditions contained in a
subject clause cannot be met after every
reasonable effort to do so, the contract
ends and there is no legal obligation to
complete the purchase or sale.
As a seller, you may wish to accept an
offer containing a subject clause (e.g.,
subject to the purchasers selling their
own house) yet still leave yourself free
to consider other offers, just in case the
purchasers are unable to remove the
condition. You can do this by inserting a
time clause in the contract. A time clause
will permit you to require the buyer to
remove all subject conditions within a
short, specified time period if you
receive another offer that you would like
to accept. If the buyer does not remove
the conditions within that time, the
conditional contract comes to an end and
you are free to accept the second offer.
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