Subject to Sale
What is a subject to sale offer?
In real estate, a subject to sale offer contains a condition that allows a buyer to sell their current home before their offer on a new property becomes unconditional. For buyers, it reduces the risk of carrying two homes simultaneously or moving into temporary rental accommodation while searching for the right property.
While a subject to sale offer provides welcome peace of mind, it rarely puts buyers in the strongest negotiating position when it comes to price, closing dates, and other terms.
How sellers view subject to sale offers
Sellers generally prefer offers without a subject to sale condition, since there is no guarantee the buyer’s current home will sell. Market conditions play a significant role in how these offers are received:
- Sellers’ market (low inventory): Subject to sale offers are rarely accepted, as sellers have stronger options available. This was the reality in Victoria for most of 2021 and 2022.
- Buyers’ market (high inventory): Sellers are more willing to consider subject to sale conditions.
- Balanced market (sales to active listing ratio of 14-20%): Subject to sale offers are more common and more frequently accepted.
The time clause: protecting the seller
When advising sellers on whether to accept a subject to sale offer, we carefully assess the circumstances before making a recommendation. If a seller decides to proceed, we ensure the contract includes a time clause.
A time clause gives the seller the right to continue marketing their home and pursue a second buyer. If a second offer is received, the seller can issue a notice to the first buyer, who then has a set number of hours to either:
- Remove the subject to sale condition and any other outstanding conditions and proceed with the purchase.
- Terminate the contract, allowing the second buyer to proceed.
Strategies for buyers making a subject to sale offer
When representing buyers, we work with you to structure an offer that is both competitive and protective of your interests. Key considerations include:
- The length of the subject to sale condition
- Time clause terms that are fair and workable
- Financing and inspection conditions
- Bridge or interim financing options, so that if the time clause is triggered before your home sells, you have the flexibility to complete the purchase if you are prepared to carry both properties short term
Every situation is different
Each client brings their own financial circumstances, timeline, and risk tolerance to the table. Whether you are buying, selling, or navigating both at once, we will work with you to develop a strategy suited to current Greater Victoria market conditions and your specific situation — with one goal in mind: achieving the most favourable outcome possible.n real estate, a subject to sale offer is one that contains a condition that a buyer adds to their offer to purchase when they want to sell their current home prior to making the offer on their next home unconditional.