A subject to sale offer involves making an offer on a property on the condition that you sell your home. This creates some risk for a seller, as it could take you several months to sell your property. As a result, they generally favour cash or subject to finance offers over subject to sale offers.

In the last few years, when demand has been incredibly strong and homes sold extremely quickly, it was very difficult to have a subject to sale offer accepted. Which was interesting – with homes selling so rapidly, there was very little risk for the seller.

Admittedly, under those conditions, these potential buyers could have easily sold their home first. However, due to the challenges in the rental market, many people were reluctant to do so. They were worried about being left with nowhere to live while they looked for their new home.

Now that competition has eased and the time to sell a home has increased, REIWA members are reporting a growing acceptance of subject to sale offers among sellers.

Subject to sale offers can work very well for buyers, but if you plan to make one, you need to understand the 48-hour clause.

Because accepting a subject to sale offer carries some risk to the seller, the contract usually allows the agent to keep marketing the home until your offer becomes unconditional – as in, you sell your home.

If the seller receives another offer they like, they can invoke the 48-hour clause. This means you will have 48 hours (two business days) to make your offer unconditional by either selling your home or waiving the subject to sale clause. If you don’t, the seller can cancel your contract and accept the other buyer’s offer.

If you are wanting to buy a new home and are planning to make your offer subject to the sale of your property, you need to get your home ready for sale before you start your search. This includes preparing floor plans and having photos taken. You want to be able to hit the market as soon as your offer is accepted.

Why? Firstly, you will want to get the best possible price for your home, particularly if you may need to finance a portion of your new purchase. To do this, your home needs to present well. Secondly, sometimes it can take months to get a home ready for sale. In that time, the home you have made an offer on will continue to be marketed and you are at risk of the 48-hour clause being invoked.

Finally, it is a good idea to work with a mortgage broker and ensure your finances are in order, just in case the 48-hour clause comes into play.