Deciding on the Right Condition
Sale of Purchaser's Property Condition vs. Finding Suitable Housing
Jun 22, 2007
It seems recently that we are seeing a resurgence of the Sale of Purchaser's Property clause. More and more people are looking for the security of finding a home prior to selling their home. The overwhelming problem with this strategy is that it limits your bargaining power when you are purchasing a new home.
An alternative to utilizing the Sale of Purchaser's Property Clause is to list your home for sale and then make any potential sale conditional on your ability to find suitable accommodation within a reasonable time frame. This gives you the power to choose a suitable property in a reasonable time frame or you can choose to stay put and not close the sale of your home.
The Sale of Purchaser's Property Clause carries an inherent risk with it as well. Most vendors want an escape clause that allows them to bump your offer out of the way. This will often request that you remove all of your conditions when you receive a bump notice, but this is not always the case. This condition leaves some buyers in a precarious state.
Questions come up in this situation. Can we bridge finance? Will there be enough time to sell our home? Are we going to lose this property? This can often lead to feelings of frustration, anger and loss.
By utilizing the condition to Find Suitable Accommodation you have placed yourself in the driver's seat. You have set the time frame to find that perfect home, and you have already sold your own home. This leaves you in a much more powerful negotiating position when searching for your next home.
Regardless of your decision you need to be aware of the consequences of both actions. The consequence of a Sale of Purchaser's Property clause is that it limits your negotiating power, and it carries the risk that your offer may be bumped out of the way by another offer. When you use a Condition on Finding Suitable Accommodation you also run the risk that your potential homebuyer will believe that you are not committed to the sale of your home.
The best way to cope with both situations is to rely on your real estate professional to guide you through the process. They will be familiar with the market activity and conditions. They will be able to provide valuable advice and guidance in the use of both these conditions.
