What does ‘Subject to Sale’ Mean?
Anyone with even just a fleeting interest in real estate would have heard the term ‘Subject to Sale’. If you’re ever going to buy or sell property it will be an option presented to you, so we want to break down exactly what it means.
‘Subject to Sale’ Defined
A ‘Subject to Sale’ offer is an offer on a property with a condition attached: the buyer has their own property that needs to be sold first. So, if you’re looking to upgrade your home and put an offer like this on a property, that offer will only proceed once your own home is sold.
When Should You Consider Making a Subject to Sale Offer?
Not everyone is in a position to be able to sell their home first and then start looking for a new one. This can be for a couple of reasons:
– Moving is super stressful, and you only want to do it once rather than have to find somewhere to live while they’re house-hunting;
– The funds from the sale of your home are required to put towards the new one;
– You can’t afford to be in a situation where you buy a new house and your old one doesn’t sell. Two mortgages is a heavy load!
Is ‘Subject to Sale’ Risky?
Getting into your dream home is hard work, and there are always challenges along the way. ‘Subject to Sale’ can help negate some of those challenges, but it doesn’t provide any guarantees. Here’s why:
– A seller would sooner take a cash or finance-backed offer than your ‘Subject to Sale’ offer;
– You may feel pressured to sell your home faster and at a lower price;
– What happens if your home doesn’t sell fast enough? Then you don’t get into that dream home;
– Sellers have leverage to ask you for a higher price if they chose to accept your offer and wait for your home to be sold.
The 48 Hour Clause
A seller will often impose this clause into a ‘Subject to Sale’ agreement. It means that if another buyer makes an offer on the home, you have 48 hours to make your offer unconditional. This means you have to get an offer on your house or organise loan finance within 48 hours or withdraw your offer.
So ‘Subject to Sale’ is a great way to show a seller you’re serious in their home. It might just help get you through the door of your dream home. As always, if you’ve got any questions, get in touch with Ristic Real Estate. We’d love to help you out!
