Two revised sale & settlement contingency forms – the Sale & Settlement of Other Property Contingency (Form SSP) and the Sale & Settlement of Other Property Contingency With Right to Continue Marketing and Timed Kickout Clause (Form SSP-TKO) – will be released on Jan. 1.
Members can log in to access Standard Forms and check out the changes for themselves on the Standard Forms page. The SSP series of forms generates plenty of questions, so let’s take a closer look at each form.
Form SSP and family are used when the buyer wants to make an offer on the seller’s property, but needs the proceeds from the sale of his own property to pay for it. Each SSP form has the same general purpose, but they vary slightly in how they function. To protect your clients, it is important to know which form does what and the rights each party is given.
Form SSP, the Sale & Settlement of Other Property Contingency Addendum, may be used when the buyer and seller agree that the seller’s property will be taken off the market (or listed as “pending,” depending on MLS rules) until the buyer gets an offer that buyer and the seller both approve of. The seller may terminate the agreement if the buyer does not receive an acceptable offer before the given deadline; however, the seller is not given the right to terminate the agreement if he receives a more attractive offer.
If the seller wants the right to continue actively marketing his property, then one of the other SSP forms is necessary. The Sale & Settlement of Other Property Contingency with Right to Continue Marketing, Form SSP-CM, gives the seller the right to continue marketing and also gives the seller the right to terminate the agreement with the buyer if the seller receives a more attractive offer during that time. However once the seller approves the terms of the buyer’s contract, the right to continue marketing and the right to terminate will end.
Form SSP-TKO works relatively similar to Form SSP-CM in that it also gives the Seller the right to continue marketing his property. However, when using Form SSP-TKO, the buyer gets a chance to beat the seller’s subsequent offer. The buyer can do this by providing either proof that the buyer has the money to proceed with the transaction without selling his property, or a copy of a contract for the sale of his property.
Carefully studying each form and knowing the difference between the three before deciding which one to recommend to your clients is important. Differences between each of these forms are small, but can make or break a transaction. More information on how to properly fill out and use each of these forms can be found in the Guidelines for Preparation and Use.