It's your lucky day—your home for sale has an offer! Sure, it's conditional on the sale of the buyer's property, but if you accept it, the property is sold, right? Well...try not to get too enthusiastic just yet. Let's delve a little deeper into the "Sale of Property" condition and what it means for you as a seller.
What is a Condition?
Any time you accept an offer with conditions, it essentially means that your home is almost sold. Basically, you need to first see if you, as the seller, or the buyer, are able to fulfill certain requirements in the agreed-upon time period before you make it official. Common home sale conditions include home inspections, securing financing, obtaining a satisfactory property information disclosure, or, in this case, the sale of the buyer's property.
What is the "Sale of Property" Condition?
The "Sale of Property" condition is essentially just as it sounds—your home's sale is contingent on the buyer being able to sell their own home first. This doesn't mean you are on the hook for months or even possibly years, though, in the instance the buyer's sale takes longer than anticipated. With this condition, setting a deadline is imperative to ensure you don't miss out on another possible sale while you wait and wait on someone else's luck.
So, let's say the buyer includes the sale of property condition, and you both agree on a deadline a month from the day of the accepted offer. If they sell their home within those 30 days, your deal will firm up, and your home will be officially sold (start phoning those moving companies)! But, if they just aren't seeing any action and the deadline passes without an accepted offer, your deal will fall through. The buyer will have their deposit returned, and your home will go back on the market.
Questions to Ask When Considering an Offer with a "Sale of Property" Condition
Just because you have an offer with a great sale price does not mean you should just accept it and move on. There are lots of factors to consider before accepting any offer, including the conditions included. This is especially true with a sale of property condition.
When considering an offer with this condition, you'll want to factor in the likelihood that the buyer's property is actually going to sell in a timely manner. So, with the help of your REALTOR®, you'll want to ask:
- Where is the buyer's home?
- What is the condition of the buyer's home (age, maintenance, etc.)
- What is the listing price?
- What are current market conditions like in their area?
- What are the average days on market for comparable homes?
- Is the buyer's home well-marketed?
Essentially, our goal here is to obtain as much information as we can to estimate the possibility of this sale going through before we accept the offer. My role as your trusted local REALTOR® includes helping to inform you at these critical junctures. Even with assistance and these questions answered, it is often still a tough decision. Because of this added stress and time frame, you may want to counter with a higher price in order to even consider this conditional offer.
What is the "Escape Clause"?
A critical element of any sale of property condition, the escape clause allows you, as the seller, to continue marketing and showing your property during the conditional period. That way, you have the option of arranging for a possible backup offer, with the first buyer maintaining the right of first refusal.
The first refusal period usually occurs within 24-72 hours of the backup offer being received, and it gives the buyer a choice. Either they can waive the sale of property condition and firm up the deal, regardless of whether their home has sold, or walk away with their deposit. Not all offers include this crucial clause, so make sure you discuss it with your REALTOR® whenever considering a sale conditional on the sale of a property.
Tips for Handling Sale of Property Conditions as a Seller
Work with an experienced local REALTOR® to sell your home. An understanding of how this condition affects transactions will be important. Working with an experienced local real estate agent will ensure the advice you use is sound.
Dealing with conditions on an offer to purchase can be confusing, especially when it comes to a Sale of Property. I can help you negotiate with a buyer to ensure you get the best possible deal for your property. Contact me today for more information!
Posted by Kent Braaten on
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