What happens when we have a “condition of sale” offer?
I get a lot a questions from buyers, sellers & people in general about what happens when we have a “condition of sale” offer.
Do we keep showing the property? Do we do open houses? Can someone else come in and buy the property instead?
These are all excellent questions, and it largely depends on the wording & terms of the original contract. However, generally speaking, listing agents will follow these general guidelines:
An escape clause – An escape clause is often added to a conditional of sale offer to allow the sellers to continue to offer their home for sale. In the event they receive another offer satisfactory to them, the FIRST buyers are given a pre-determined amount of time, usually 24-72 hours to either “firm up” (waive their conditions) or the home goes to the second people.
The property continues to be marketed for sale, however largely via private showings and not open houses. It is a tricky balance for both sellers & the listing agent – you want to honour the fact that there IS a contract in place, but you also want to continue to attract potential buyers.
The terms of the original offer CANNOT be disclosed, under any circumstances. People will always ask “How much is the first offer?” Listing agents absolutely cannot disclose the original offer. To do so would breach REBBA. Real Estate and Business Brokers Act, 2002(REBBA 2002) is the legislation that real estate salespersons, brokers and brokerages must follow. Someone cannot come in and simply offer more than the first offer to bump it (this is a common question I am asked).
As a real estate sales representative, it is often a tough decision as to whether or not we accept a condition of sale offer to begin with. This decision is decided based on a number of things including the current market conditions, terms of the offer, and if the listing agent thinks that the buyer’s house is “saleable” ie – will sell quick.
A potential drawback to accepting a condition of sale offer is that it often “slows down” activity on a property – the number of showings are usually lower as many buyers feel it is a waste of time to view houses with a conditionally accepted offer.
This type of situation is just one example of why it is helpful to have a licensed real estate agent working for you! We know how to navigate these complex scenarios.
Comments or questions? I would love to hear from you!