From the blog...
Conditional Upon Sale of Buyer’s Current Property, What Does it Mean?
The Ottawa real estate market has shifted in many ways over the last few months. One thing we are seeing more of is conditional offers being accepted by sellers. In some cases, a buyer is even able to make their purchase conditional upon the sale of a current property. This is great news for buyers who are relying on the funds they receive from the sale of their present home (or cottage or investment property) to finance the purchase of their next property.
There are two parts to this condition. The first part defines the subject property to be sold and gives an appropriate amount of time for the buyer to secure an accepted Agreement of Purchase and Sale (example below):
“SALE OF CURRENT PROPERTY: This Offer is conditional upon the sale of the Buyer’s property known as 123 Main Street, Ottawa ON, K1K 2A2. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than 11:59 PM on November 30, 2022, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.”
The length of time given to sell the buyer’s property will change according to the average number of Days on Market in that area, and other factors. The buyer should expect the listing agent to ensure that their property is already listed on MLS (or very close to it), and that it is priced in a way that will promote a quick sale and sufficient sale price from a qualified buyer.
“Provided further that the Seller may continue to offer the property for sale and, in the event the Seller accepts another Offer satisfactory to the Seller, the Seller may so notify the Buyer in writing by delivery to the Buyer personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto. The Buyer shall have 72 hours from the giving of such notice to waive this condition by notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto, failing which this Offer shall be null and void, and the Buyer’s deposit shall be returned in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.”
Even after accepting an offer with this condition, the seller is allowed to continue to market their property for sale. If they accept another offer, they will notify the original buyer- at which point the original buyer can decide to remove their condition(s) and secure a firm agreement for the property OR walk away from the purchase without penalty.
If you are a buyer who will need this condition in an offer, this is a fantastic time to be in the market for your next home. Prices have softened since the beginning of the year, and supply in many areas is high enough that there are often multiple properties that fit your criteria. This condition can be a valuable tool for buyers, yet there is a lot to consider. The most important part of having this condition included in a successful offer is planning. Speak to your Realtor today about how best to plan your next move and leverage the current conditions to your advantage.