A Subject to sale clause – allows you to make an offer on your next home conditional on selling your current home. This sounds like the perfect scenario when you must simultaneously sell and buy your house. The catch is most home sellers plainly won’t accept a subject to sale clause without adding a time clause. A time clause gives the seller an out in case a better offer comes along. The time clause allows the seller to bump your offer and take someone else’s offer. Usually, we’ll see a time clause between 24 and 72 hours, not including weekends and holidays.
A subject to sale clause will always include a deadline for when the home must be sold, and the clause fulfilled or the offer falls through. We’d generally see a subject to sale deadline of around a month. During negotiations, the deadline will depend on the average market days and the buyers’ and sellers’ goals. From the seller’s perspective, tying up their property for a month with a contingent offer isn’t likely their first choice. That’s why it’s so common to see the time clause hand-in-hand with the subject to sale clause.
Before considering making your offer conditional on selling your home, consider how this affects your negotiating strategy. Having a subject to sale offer in place may give you a sense of security, even with the time clause for the sellers. It may even discourage another buyer from offering because of the arduous process of calling in the time class. On the other hand, it may make the property more desirable to other purchasers once they see an offer already in place. You’ll need to weigh this up before deciding.
