Something that’s been coming up with our buyers and sellers lately has been the sale of the buyer’s property, so let’s go over that now.
If the buyer needs to sell their home to buy a home in order to purchase a home, they can put in a condition called an SBP or an SPP or an SOP (depending on where you are and the local vernacular).
Here in Kingston and the area standard is the Sale of Buyers Property (SBP).
So that means the purchase of this home is conditional upon the sale of the buyer’s property. And there’s a timeline there. It could be two weeks or two months in which the buyer has to sell their property.
But because it’s such a long timeline, there’s an escape clause.
An escape clause is a 24 to 72 hours period, wherein if the sellers get another offer, they can inform the first buyers and say, “Hey, we have another offer. We’d like to take that offer. So you have to commit or let this offer go.”
So at that point, the buyers either say,
“Okay, I’m letting my condition go. I’m waiving my condition to sell my home in order to purchase this home.”
OR
“I am escaping — getting out of buying the house, not buying this house, because my SBP was not fulfilled.”
And that’s what a Sale of Buyers Property condition is.
The sellers don’t love it because there is not full commitment to buy the house. They are waiting, tied up with the buyer to ensure the buyer will sell their own home before they commit to purchasing the seller’s home.
For buyers, sometimes it’s the only way, but it depends on the market whether it’s used or not used. In a buyer’s market, it is used, but if it’s a hot seller’s market, an SBP will not be accepted.
Watch the video here
