Side Effect(s) of a Sluggish Market
Some things are just ingrained in you: you don’t leave the Kitchen with a pot of boiling water on the stove.
You don’t leave the house — at least during the day — with the lights on.
And, if you’re a Realtor, you don’t leave a “live” (counter)offer on the table.
Contracts 101
Yet in the last two years or so I’ve seen (and handled) more deals where that’s exactly what has happened, due to the (often) sluggish pace of negotiations that accompany a slow market.
As a former business lawyer, that certainly makes you nervous: should one party or the other have a sudden change of heart, a deal that everyone thinks is on the back burner can suddenly become a consummated transaction.
Mitigating that risk at least somewhat: the frequently large impasses between Buyers and Sellers these days — another characteristic of a sluggish market.
P.S.: Another tactic to extinguish live offers is to include an expiration date — typically 24 or 48 hours.
But I don’t often see (or use) such clauses selling real estate in Minnesota, for three reasons: 1) it seems heavy-handed, and goes against the grain of “Minnesota Nice”; 2) a deadline can effectively give the other party a prescribed amount of time to stir up more interest, actually harming the interests of the party issuing the deadline; 3) contract law allows either party to revoke an unexecuted offer or counter-offer at any time.
