There are ways to commit interested purchasers where a contract is already in place. But, the process has to be done properly so you do not commit your vendors to sell to more than one party!
A back up offer can be signed by both the vendor and a backup purchaser if there is already a live contract in place provided it is still conditional. Naturally, the vendors want the most favourable deal or other options should the initial contract fall through. This may not necessarily be the offer that is for the highest price but may be the offer that has the least conditions. Once the vendors accept a particular offer, one contract can be accepted and signed as a backup offer at any stage prior to the first contract becoming unconditional. This will give the backup purchaser the reassurance that they are next in line if the prior contract does not confirm. So the vendor and both purchasers are fully protected, it is important for you to ensure that:
This clause is often used in an contract when there is a long period of time for a particular condition to be satisfied. For example, the contract is conditional on the sale of the purchaser’s current home within six months of the contract. Without a roll-over clause, the property can be off the market for a long period of time until the purchaser manages to sell their property or worse, does not sell their propoerty at the end of the six months. The addition of a roll-over clause gives the vendor the best chance of selling and adds fairness to the transaction. If the original contract is subject to a roll-over clause and a second contract is accepted, then the vendor must give written notice to the purchaser under the original contract giving them a set period of time to confirm the contract unconditional. If the original purchaser cannot confirm by the end of the set period of time, it is cancelled and the second contract comes in to force. Points to remember are:
Where done correctly, you can put your vendor in a strong position to obtain a sale. Where done incorrectly back up agreements can have very dire consequences and can result in the property technically being sold twice.
We are always happy to help recommending appropriate clauses or reviewing contracts prior to the parties signing.
Don’t hesitate to reach out to the team directly or if you’re not sure who best to contact, reach out to us via our contact us page.