Accepting a Conditional Offer on your property? Consider these 5 things
Receiving an offer is exciting, especially when it's within your ideal price range, but how do you evaluate a conditional offer house?
And what is a conditional offer really? A common type of conditional offer is one with an SBP clause, which stands for Subject to the Buyer selling their Property. This conditional offer means that your sale relies on the buyer making a sale.
Accepting an offer with an SBP clause can significantly delay completing your sale. So let’s explore how you can navigate the conditional offer meaning beyond the fine print — how does it look in practice?
Here is Amy Flowers sharing her thoughts on conditional offers with SBP clauses
1. Consider Overall Market Activity
How many showings have you had? Are you in a buyer’s or seller's market? Conditional offers with an SBP clause mean your market conditions will similarly apply to the buyer’s sales process.
2. What is the Buyer Selling?
If the buyer is selling a property similar to yours, they’ll face the same market conditions you’ve been facing. Alternatively, if they’re selling a townhouse, it might sell quickly. Conversely, it might take much longer to find a potential buyer if they're selling a multi-million dollar property.
3. Is The Buyer’s Property Sales-Ready?
What is a conditional offer beyond the numbers and property type? First, you’ll need to consider how far along they are in making their home sales-ready. Do they have decades of clutter to sort through and move out? Are there any necessary repairs? Has the property inspection been done and has it been appraised?
A delay in these factors can significantly complicate closing your sale, as they’ll have plenty of work today before their first showing. Conditional offers to purchase examples are filled with cautionary tales of looking only at the property type and value rather than the overall sales process.
4. How Will The Buyer Price Their Property?
Property pricing is a vital aspect of selling a home. Is the buyer going to price competitively to attract the most buyers possible or price above average to get the most for their home?
If the buyer prices their home improperly, you’ll be stuck waiting to make your own sale.
5. Who is the Agent Selling the Buyer’s House?
Real estate agents play an essential role in selling a home. Who is your buyer working with to make their sale? What is their track record, and do they have experience in current market conditions? Are you confident they’ll be able to make the sale?
You can see how accepting a conditional offer with an SBP clause adds a new level of complexity to finalizing your sale. However, it can still be worth accepting the offer if everything discussed above looks favorable. Thoroughly evaluate the entire situation and make an informed decision before accepting any conditional offers.
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