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  • Writer's pictureShawn Patrick Moloney

Guiding Clients to Understand the Importance of a Suitable Housing Clause

Guiding sellers through a suitable housing clause can lead to a sale.

In real estate transactions, few terms hold as much weight as the suitable housing clause. As real estate professionals, it's crucial to ensure our clients grasp the significance of this provision, as it can profoundly impact their buying or selling experience. Let's go over what a suitable housing clause entails and how it affects both sellers and buyers, equipping us to better guide our clients through this process.

First and foremost, a suitable housing clause empowers sellers to list their property on the market before securing alternative accommodations. Typically disclosed by the listing agent alongside other pertinent information on the Multiple Listing Service (MLS), its activation occurs upon receiving an offer, wherein it is formalized between the buyer and seller. This clause dictates that the seller must secure housing before finalizing the sale of their current property. It's important to note that while these agreements may or may not include specific timelines, they serve as a crucial mechanism for sellers navigating the transition between properties.

For sellers, leveraging a suitable housing clause offers a strategic advantage, allowing them to synchronize the sale of their current property with the procurement of a new one. This streamlined approach enables sellers to utilize the proceeds from their current sale towards their next investment. However, it's imperative to recognize that this arrangement introduces an element of uncertainty for potential buyers, potentially affecting the number of offers received. Despite its commonality, the inclusion of a suitable housing clause does impact buyer interest to varying degrees.

On the flip side, buyers must navigate certain considerations when encountering a property with a suitable housing clause:

  • If the seller fails to secure alternative housing, the buyer retains the right to withdraw from the transaction, with the deposit being returned.

  • Lack of a specified timeline for the seller to secure housing exposes the buyer to increased risk.

  • Certain sellers may necessitate this clause to facilitate the sale, underscoring its prevalence and necessity in certain scenarios.

  • Understanding the seller's preferences and financial constraints can provide insight into the likelihood of them securing suitable housing.

  • Negotiating flexibility regarding the timing of the home inspection may be contingent upon the seller identifying a prospective property.

Undoubtedly, the inclusion of a suitable housing clause introduces a layer of risk for buyers. Nevertheless, these clauses are commonplace in real estate transactions and often represent a necessary step for sellers embarking on their next chapter. When guiding clients through the buying or selling process, it's essential to ensure your client understands the implications of a suitable housing clause. 

In conclusion, equipping our clients with a comprehensive understanding of the suitable housing clause is paramount in facilitating smooth real estate transactions. By providing expert guidance and insight, we empower our clients to navigate the complexities of the market with confidence. Take time before meeting with your next client to put together a helpful worksheet to help them better understand this clause.

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