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The 72 hour contingency clause is often referred to as a first right of refusal; that is close but not quite accurate. A first right of refusal is an agreement between a seller and potential buyer that if the seller accepts an offer on a piece of property the potential buyer has a certain time frame to match the offer. There can always be other details built into the agreement, but this is a short basic description.

A 72 hour contingency (the time can be substituted with any number – 24 hour, 48 hour are both common also) is part of an agreement to buy a house that is subject to the sale of another house. It accompanies a fully executed purchase agreement that goes into effect when the 72 hour contingency clause is removed.

After buyer and seller come to terms with the condition the buyer needs to sell, the seller’s house stays on the market and other offers can be negotiated. Once the seller receives another offer, notice is served to the first buyer and that buyer has 72 hours to show their house is sold, show they willing and able to buy without selling, or be released from their offer. If the first buyer chooses to “perform” and go through with the sale, the 2nd offer is then voided. If the first buyer hasn’t sold and doesn’t want to or able to buy without selling the 2nd offer slides into place and the first offer released.

If the first buyer sells, they remove the 72 hour contingency clause and the offer then becomes subject to the close of their house.

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Interest rates are low- super low. How low? Low enough you can pay today’s prices for a smaller payment than 2008 prices with 2008 interest rates.

Last week’s rates for a 30 fixed with 20% down and a half point was 3.625%. With good credit of course. A few weeks ago you could get a conventional mortgage for only 3.5%

But they won’t stay this low forever. As the housing market, and economy in general, improve the rates will go up. I doubt they will ever get back up to the 9+% they were when I got my license, but to put things in perspective the average rate during peak price time of 2003, 04, 05 was right around 5.8%. The National Association of Realtors (NAR) projects interest rates will get as high as 5.4% by the end of 2015.

What this means for you, the home buyer: If you can afford a $500,000 house today you will only be able to afford $405,000 at the same payment. You don’t like what you’re looking at for $150,000 today, be prepared to stay under $120,000 if NAR is right.

See the charts below for an idea of how your buying power diminishes as interest rates go up.

buyers purchasing power 300k March 2015buyers purchasing power 150k March 2015buyers purchasing power 500k March 2015Jackie@JackieHawley.com
(248)736-6407
www.Search-The-MLS.net

www.MiRelocation.com

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If you email me and don’t get a reply within 24 hours (usually much sooner) the chances are I never received your email. Just because you sent it, doesn’t mean I received it. Technology is great, but is not perfect. Sometimes I get the feeling others (especially other Realtors) feel a bit put out when I ask for confirmation of receipt. I’m not trying to be snarky when I do that; I just want to make sure you received my email.

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On Nov. 11 I got my first deer. A pretty good sized 4 point.

dead deer

Nov. 22 I got my new car. A deer hunting tip- it’s cheaper to bow hunt than to use your car.

new car

If you are looking for hunting property, please don’t hesitate to call Jackie Hawley with ReMax Encore.

Jackie Hawley, Realtor
Cell: (248)736-6407

Jackie@JackieHawley.com

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