Subject to sale of PPOR offer

Are these generally considered a waste of time? Is there any way to make them more appealing? Thanks

 

Couple different tips....
- Offer the listing for sale of your property to the agent you're buying from. Getting a listing is the hardest part of their job.
This will get the agent on your side and potentially the vendor as bit more control.
- Only offer subject to finance, but have a extended finance clause that gives you time to put your property on the market and unconditional.

 

Yes: waste of time. Especially in a flat or declining market.

Perhaps be more specific like specifying what price you will sell for and make the offer time limited.

 

I am also interested in how subject to sale clauses are used (NSW) and as a buyer if Vendors are willing to consider them.

@Brady , I agree that putting in a subject to finance clause would give a little more comfort to the Vendor, however as the buyer, if my property doesn't sell, then at some point I could be left holding two houses (and the bank not willing to fund the new purchase as sufficient funds couldn't be provided due to the current PPoR's sale not going through?).

 

Any finance would be approved on the proviso that the house sold - you generally wouldn't get an approval without the house selling especially if you weren't open to the idea of keeping it.

 

Yes

Short of striking them out by putting a line through the condition and both parties initialing the change, No

 

If you do it then it is best to think that the sale won't go through.
With that in mind also think about the timings of things and how they are contracted.

example a 2 month settlement subject to them entering a contract to sell their house - what happens if they enter a contract one week before your 2 month period is up? You would probably need to give them around 3 weeks to settle so perhaps a 2 month settlement period with you having the ability to terminate the contract if they can't sell within 1 month of signing.

 

Sunset clauses are used to make them more attractive. I.e a higher offer can be taken after a set time period.

 

Thanks for the comments - much food for thought.
It would be me putting a 'subject to sale' clause on a house as the purchaser (as opposed to me being the vendor). I preferred the 'sale' clause opposed to a finance clause as it essentially holds the new property until mine sells, as opposed to a finance clause which, if mine didn't sell (regional NSW - slower selling generally), I would have to see if the vendor was willing to renegotiate a new contract. My thoughts are that if I was to only have a finance clause, I would need a rediculously long settlement period (5mths +) to allow for the longer selling period, then settlement to make the two align.

Alternative is to sell first, then rent. Not preferred with livestock involved.

 

You will also have to worry about whether your sale will actually settle. Not all contracts complete. I wouldn't feel comfortable myself so would probably go down the bridging loan route just in case.

 

Thanks all, important points for consideration. Will consider options further.

 

I have a question on the opposite side. We are the sellers and the buyers have asked for 2 clauses: (1) they (the buyers) put a deposit bond instead of cash because they are selling their house to buy ours; and (2) they (the buyers) want to insert a "subject to sale" clause in the contract.
I think the first clause (a deposit bond) is acceptable. But, I am a bit unsure about accepting the "subject to sale" clause. The buyers' solicitor has indicated that the buyers have accepted an offer on the sale of their house and they have made their contract unconditional - that is they have locked their buyers in. If this were the case, then why do they need the "subject to sale" clause in our contract?
Your thoughts and comments, please? Much appreciate in advance.

 

@ozwanderlust I wouldn't accept it. If they have an unconditional contract on their existing house, it shouldn't be necessary.

 

What is the definition of sale?

Not all settlements happen btw.

 

If you waited for settlement, then you would need to rent while you looked for your next place? What are the reasons, and the number/proportion/likelihood of a settlement not occurring?

 

If it's subject to anything which may delay settlement and favourable to the purchaser, then you too ought to seek compensation by way of price adjustment (if it's a rising market, no need if the market is going backwards).

 

Reasons for not settling?
a. Change of mind
B. No funding
C. Death
D. Insanity
E. Incapacity
F. Bankruptcy

Are probably the main ones.

It is rare but does happen

 

Thanks, everyone, for your replies - much appreciated. Certainly I will consider the buyers' request for "subject to sale" very carefully. Most sale transactions are likely to settle, but there will be the odd ones and we don't want to be in this situation.

 

The question is how much is it worth? You say, look, you’re ball park what someone else will pay. If you’re worried about missing out on the property and you want me to take a risk on you, up your offer to X and I’ll do it.

 

Subject to the sale with a sunset clause.

I actually accepted an offer subject to the sale of the purchasers property and I also had a contract on another property subject to the sale of mine at the same time.
Went off in a chain reaction and all three properties settled on the same day.

Secret is having one agent involved and responsible for making it all happen. (although the agent wasn't involved in my purchase just the other two transactions)

Worked like clockwork and the best deal I've ever done.

Willy