Subject to Sale: What It Means When You're Selling to Buy (or Buying to Sell)
Subject to sale is a funny thing — it doesn't make for an attractive offer to a seller.
If you think about it, the sale is hinging on someone else's sale, and you don't know if their price expectation is realistic or not. This is where selling first is far more attractive to a seller.
What Does "Subject to Sale" Mean?
A subject-to-sale offer is when you make an offer on a property that's conditional on you first selling your own home. It protects you from ending up owning two properties (or none), but it puts your offer behind anyone who's already sold, or isn't relying on a sale at all.
Here's a quick rundown of the biggest mistake I see people make when they're selling and buying at the same time:
Why Is a Subject to Sale Offer Less Attractive to Sellers?
Because the sale is hinging on someone else's sale, and the seller doesn't know if your price expectation on your own property is realistic. From their point of view, they're taking their property off the market (or turning down other buyers) to wait on a chain of events they can't control.
Your Alternative: Selling First
You have two options if you'd rather not go subject to sale:
- Sell, then rent or move in with someone temporarily while you look for your next home
- Sell with a longer settlement (90 or 120 days) and buy in that window
A longer settlement puts a timeline on your purchase and can get a bit messy - it's also not always attractive to your buyers, who are often keen to get into the property, depending on their own rental or selling situation.
There's no right or wrong way to do this. It depends on your situation.
How to Make Your Subject to Sale Offer More Competitive
If you are going to go down the subject-to-sale route, the best move is to get your property ready to sell before you start making offers - photos, videos, all your marketing pre-prepared, so you simply have to flick the switch to get it up for sale.
That way, you can start searching for a property knowing that if you find the one you like, boom, you're for sale. If you don't find the right property, you keep looking. Being basically ready to go is what makes a subject-to-sale offer attractive.
What Is a Sunset Clause (And How Does It Protect You)?
Any subject-to-sale offer will include a sunset clause, which protects both the buyer and the seller. You're protected if you can't sell your property in time, and the seller is protected if another buyer comes along and wants to buy unconditionally.
In practice, this means if a better offer comes along, your subject-to-sale offer generally has 48 hours to get an unconditional contract (building, pest, and finance approved) on your own property - or the seller can move on.
Do You Have to Sell Through the Agent you're buying from?
No. If you buy subject to sale, you don't have to list your own property with the seller's agent. Sometimes an agent will suggest their seller would prefer it, because it gives them more visibility on how your sale is progressing. Just keep in mind - they'll be working to get your property under contract as fast as possible, by any means, because it's a bonus commission on top of the original sale.
Frequently Asked Questions
What does "subject to sale" mean in a property offer?
It means your offer to buy is conditional on you first selling your own property. If you can't sell within an agreed timeframe (protected by a sunset clause), the offer can fall through.
What is a sunset clause?
A sunset clause sets a deadline - usually 48 hours after a better offer comes in - for you to secure an unconditional contract on your own property. It protects both you and the seller from an open-ended wait.
Is it better to sell first or buy first?
Selling first is generally more attractive to sellers, since your offer won't be conditional on anything. The trade-off is you may need to rent, move in with family
temporarily, or negotiate a longer settlement while you find your next home.
Do I have to sell through the agent selling the property I'm buying?
No — you're free to choose your own selling agent. An agent may suggest otherwise for their own visibility on your sale, but it's entirely your decision.