Should You Sell Your House Before Buying A New One?

How a condition on sale offer works

When you make this type of offer, a few key terms get written into the Agreement of Purchase and Sale:

• The condition. Your purchase depends on your current home selling, usually by a specific date.
• The deadline. You'll agree on how long you have to sell. This is often several weeks, but it's fully negotiable.
• The escape clause. This lets the seller keep their home on the market and accept another offer, as long as they give you notice first.
• The notice period. Once you're notified, you have a set number of hours to remove your condition or let the deal go. 24 hours is common, but the exact time is negotiated.

What happens if the escape clause is triggered?

Here's how it typically plays out, step by step:

1. 1

   Your conditional offer is accepted

   You and the seller agree on price and terms, including the sale condition and escape clause. The seller's home often stays on the market, sometimes marked as "conditionally sold."

2. 2

   Another buyer makes an offer

   A second buyer comes along and the seller accepts their offer as a backup, ranking behind yours.

3. 3

   You receive notice

   The seller's agent formally notifies you that the escape clause has been triggered, and your clock starts.

4. 4

   You decide

   Option A: Remove your sale condition (and usually any other conditions) and firm up the deal. The home is yours, whether or not your current home has sold.
   Option B: Let it go. Your agreement ends, your deposit is typically returned, and the backup offer moves into first position.

Option A means you could own two homes at once for a while, so talk to your lender about bridge financing or other options before you make the offer, not after notice arrives.

Buyers: how to make a strong condition on sale offer

Sellers are more likely to accept a conditional offer when they believe your home will actually sell. Here's how to show them it will:

• Get your home market-ready first. Have it cleaned, decluttered, photographed and ideally listed before you write the offer.
• Price your current home realistically. An overpriced home that sits is the biggest risk to your purchase. Price it to sell within your deadline.
• Talk to your lender early. Know whether you can carry both homes for a short time, and get pre-approved for the new purchase.
• Make the rest of your offer attractive. A solid price, a good deposit and flexible closing dates can make up for the condition.
• Be ready to move fast. If the escape clause is triggered, you won't have long to decide. Know your plan in advance.

Sellers: should you accept an offer conditional on sale?

If you're selling in Oxford County and a conditional offer comes in, it's worth a serious look, especially in today's market. With more homes for sale than we've seen in years, many buyers need to sell before they can buy.

Your REALTOR® can look at the buyer's home, its price and the local market to help you judge how likely it is to sell in time.

Other ways to buy and sell at the same time

Sell first, then buy

You know exactly how much money you have to work with and you can make firm offers. The trade-off is you may need a longer closing or a short-term rental if you don't find your next home in time.

Buy first, then sell

You secure the home you want with a firm offer, then sell your current one. This gives you a strong position as a buyer, but you take on the risk of carrying two homes if yours takes longer to sell.

The right choice depends on your finances, your timeline and the market in your area. I'm always happy to walk through the options with you.