The Weasel Clause is like a slippery snake finding its way into the most obscure part of your real estate contract. Like poisonous venom, the Weasel Clause is meant to take a bite out of you, in the event that someone doesn't like the way the deal is going and wants out. The Weasel Clause can be a slippery way of escape out of a contract. Usually disguised and stuffed in a sentence or paragraph of fluffy verbiage (where it is barely noticed), the Weasel Clause is ready to kill the deal in one bite!
Here are two classic examples of the Weasel Clause:
1. This offer is subject to Buyer obtaining financing with a lender of Buyer's choice, at terms and conditions acceptable to Buyer. What terms & conditions are going to be acceptable to the Buyer? If they are not defined upfront, they are left up to interpretation. And what if the Buyer doesn't like the terms and conditions of their loan on the day of closing? You guessed it, they have a right to back out.
2. This offer is subject to Buyer performing a walk-through of the home prior to closing. What if they aren't happy with the walk-through on the day of closing? You got it, they can walk away from the deal. We may all agree that a walk-through is important. However, it may be best to make the walk-through a "courtesy" of sale, and not a "contingency" of sale.
Don't be fooled by the Weasel Clause, it's there for a purpose. Even though the other agent says his/her client has pure intentions... yada, yada, yada... we all know that people typically go into protect and defend mode when something goes wrong. Make sure you protect and defend your client in the negotiation stage, so the Weasel Clause doesn't take a bite out of you!
This information is provided courtesy of Melinda Peterson ~ Real Estate Cafe
The weasel factor got me a few times already. .great analogy
A walk through in our area is done to inpect for repairs and is not a courtesy. If they are not done they are escrowed (double the cost) We also have a clearly defined interest rate in our contract. I agree, you cannot be too careful to protect from weasels! :)
I believe the listing agent has the responsibility to let their clients know the ramifications of all provisions of the contract.
Melinda, it pays for the seller to read and analyze every word of the offer before accepting it. Putting deadlines to remove contingencies will help eliminate these issues.
I guess this is just pressing the point but, the way #2 is worded, all the buyer has to do is not do the walk-through and can get out of the contract??? As with Marcia's area the final walk-through is to make sure requested repairs are completed.
Me too Fernando... I learned my lesson years ago!
I totally agree Larry & Michael :)
Marcia & Nick ~ In our area, the home inspector performs the walk-through inspection prior to closing and issues a "Certificate of Completion" for completed repairs. The walk-through Weasel Clause I am referring to here has nothing to do with repairs. Interesting that the term "walk-through" has an entirely different meaning in various parts of the country :) Sounds like our sales agreements differ too, as we are required to insert our own verbiage regarding financing (there are no pre-printed boxes to check for interest rate or terms). Thanks for sharing that info you two!