With an escape clause on a condition of currently accepted offer a seller may consider other offers if their current offer is conditional on the sale of the buyer’s existing home or a longer then normal condition date.

This is because the sale of the home does not become firm and binding until all of the conditions in that first offer have been fulfilled or waived. To avoid any confusion the conditional buyer is generally aware that the seller via their Realtor and verbiage in the currently accepted offer intends to continue to market the home to other potential buyers.

The escape clause would require the Seller to notify the first Buyer if another offer has been accepted and gives the first Buyer a set period of time — for example, 24 hours in order to meet the conditions on their own offer, or to walk away from the purchase.

If the first buyer is unable to sell their existing home, for example, and or fulfill the condition that includes the escape clause, and this is confirmed in writing, then the first deal becomes null and void and you can proceed with the Purchase of the home.

However, if the first buyer meets the conditions outlined in the offer, the home is sold to the first buyer under the original terms of the first accepted offer. This is known as the “right of first refusal.”

To use an escape clause, your Realtor will make sure that the second agreement contains a condition that the offer is accepted only if the first agreement falls through.

It’s important to note that such provisions during the negotiation stage may affect the second buyer’s decision to make an offer, but it is recommended that you discuss the pros and cons of this approach with your Realtor and/or your Lawyer

HOWEVER the proper terms and conditions MUST be included in each agreement.

Thanks To ASK JOE Visit www.reco.on.ca for regulations