What Is a Sale of Property Condition in Real Estate?

Name: Beth and Ryan Waller, Guelph Real Estate Agents
Price range: $

A sale of property condition (SOP), also commonly referred to as Sale of Buyers Property (SBP) is a condition a buyer puts into a real estate purchase transaction that states they’ll purchase the new home only if they are able to sell their current home. If they cannot sell their existing home in a given time frame, they are not obligated to purchase the new home and can walk from the transaction without penalty.

Is this common in Guelph real estate?

More and moreso, yes it is. If you watch any of our Youtube videos or read our Guelph real estate market blog, you already know that we’re in a balanced market. Depending on the neighbourhood or type of property, you may even be in a buyers market.

’ve been house hunting in Guelph lately, you’ve probably heard the term “conditional offer” tossed around a few times. One of the more common conditions — especially when the market cools off — is the “sale of property” condition.

It’s not the flashiest topic, but understanding this clause can make or break a deal. Whether you’re buying, selling, or just curious about how it all works, here’s what you should know.

So, how exactly does a sale of property condition work?

Let’s give a practical example:

Let’s say a couple in Guelph’s Grange Rd neighbourhood wants to upsize to a detached home in the Kortright Hills area. Kortright Hills has long been one of Guelph’s most expensive areas and the couple can’t proceed with the purchase unless they sell their home for a certain price.

They find the perfect house listed for $1,000,000 in Kortright Hills. In order to make the financials work, they need to sell their home in East Guelph for $750,000. Any less than that and they are not comfortable proceeding.

As a result, they make an offer conditional on the sale of property (SOP or SBP) within 30 days. This means that the buyer has 30 days to sell their home (key point: to SELL it, not CLOSE on it) or they can walk away from the Kortright Hills purchase without penalty. The seller accepts this, but includes a 48hr escape clause (which we’ll get to later).

They list their East End home and receive an offer in one week that has a financing and home inspection condition for a 5 day period. In the end, the conditions are released and they sell their home firm for $775,000. They can now release the SOP condition on their new Kortright Hills home.

What if they didn’t accept an offer?

Let’s look at it the other way: the buyers of the Kortright Hills home put their East Guelph house on the market and received an offer for $700,000 in one week. Remember, they needed $750,000 to make the new purchase work. So, they decline the offer of $700,000 and don’t end up selling. 30 days pass and the Kortright Hills offer is about to expire. The buyer and seller have two options:

They can renegotiate the length of the condition to give the buyer more time to sell (often times, there is discussion about a price reduction at this time, too)
They can release each other from the Agreement, the buyer gets their deposit back and the house goes back on the market. This is not ideal for the seller as they lose 30 days and momentum.

Why buyers use a sale-of-property condition

There are a few reasons a buyer might include this clause:

They need the equity from their current home.
For many homeowners, their down payment for the new home come from the sale of their existing home. Without that sale, they can’t close on the new one because they won’t have the funds needed.
It reduces financial stress.
Many people are risk adverse. They want to know that they won’t be (and often can’t be) carrying two mortgages, two sets of bills, and double the property taxes. This condition protects the buyer from that risk.
It gives time to sell properly.
A sale of property condition (SOP) allows the buyer to list their home at their price. If they don’t get it they don’t sell. For many this is a much better alternative to rushing to sell their home at a discount just to make a closing date. However, be warned that most listing agents that will accept a SOP condition offer will be asking questions around how long it will take to list the buyers property. And, at what price. They want to ensure that if they accept this condition, the deal has a fighting chance of finalizing.

In a slower market, this kind of condition can be a lifesaver. But in a hot market like Guelph’s has been for much of the last few years, it can also make your offer less appealing to sellers.

The downside for buyers

While it sounds like the perfect safety net, there are trade-offs.

Your offer looks weaker.
Imagine you’re selling your house. You have two offers: one with a SOP condition and the other without. Why would a seller take a SOP condition when they don’t have to? A sale-of-property condition can make your offer significantly less competitive — especially if there are multiple offers on the table. In fact, in some cases we’ve had sellers outright refuse to entertain an offer that has a sale of property condition
You could lose the home to another buyer.
Most of the time, sellers will include an escape clause (also known as a kick-out clause). This means they can keep showing the property and even accept another offer while yours is conditional. If they do, you’ll get a short window (usually 48 hours) to either remove your condition or step aside.
It’s still up to you to sell.
Even though you have protection, you can’t just sit back and wait. You’re expected to make a real effort to sell your home — list it promptly, price it fairly, and work with your agent to market it well.

What it means for sellers

There is no doubt that a sale of property condition is intended to benefit the buyers (like all conditions). For sellers in Guelph, receiving an offer with a sale-of-property condition can be a bit of a double-edged sword.

On one hand, it’s still an offer — which can be exciting, especially if your home has been sitting on the market for a while. On the other hand, it’s not a sure thing and you, as the seller, have no control over if and when they buyers house will sell. You just have to wait. Unless you add an escape clause:

Sellers can (and almost always do) add an Escape Clause into the offer:

Conditions in offers are meant to benefit the buyer. However, on a Sale of Property offer a seller has one thing they can (and almost always) do: add an escape clause. One of our most popular blogs that you can read here, is explaining what an escape clause in real estate

Here’s how it usually plays out:

The home is marked as “Sold Conditional Escape” (SCE) on MLS or HouseSigma or any other apps.
The seller keeps showing the property to other potential buyers.
If a new buyer comes along with a strong, firm (no conditions) offer, the seller can trigger the escape clause to the existing buyer.
The first buyer then gets first right of refusal: they have a set amount of time (usually 48hrs) to remove their condition and firm up the deal or back out.
If they firm up the deal, they have bought the house and need to sell their house outside of the agreement. If they walk away, they get their deposit back and the seller automatically accepts the backup firm offer and the house is sold to them.

This gives the seller flexibility to continue to show the house and the ability “to escape” the current offer if they get something better while the buyer is trying to sell their house.

What goes into a sale-of-property clause?

While your Guelph real estate agent will handle the wording, these are the main parts of the condition:

The time frame — how long the buyer has to sell their home (often 30–60 days).
Definition of “sale” — whether it means a firm offer or an actual closing.
Option to waive — the buyer can choose to waive the condition if they feel confident their home will sell.
Escape clause — allows the seller to accept another offer and give the buyer notice to remove their condition or walk away.
Deposit protection — if the buyer can’t sell and the condition isn’t met, their deposit is returned in full.
Communication — clear instructions on how and when both sides must give notice that the condition has been fulfilled or waived.

The details matter! A vague or poorly written condition can cause big headaches later! You’d be surprised how big of a deal a single word can be. This is why it’s important you work with a realtor (like us!) who is familiar with the implications and importance of these agreements.

What it looks like in Guelph’s market

The Guelph market has gone through some shifts in the past few years. When it’s hot and homes are selling quickly, conditions like this are rare — sellers just don’t need to accept them.

But when the market balances out, we start seeing more sale-of-property conditions again. As of late, with interest rates holding and homes staying on the market a bit longer, these types of offers are slowly making a comeback.

That said, sellers in Guelph are still cautious. Most will only consider a sale-of-property condition if:

The buyer’s existing home is already listed for sale, or
The home is in a price range or neighbourhood that’s moving quickly, or
The seller hasn’t had much interest and is willing to wait.

If you’re the buyer, your agent will help you decide whether adding this condition makes sense. This is based on how competitive the property is and what kind of leverage you have.

Tips for buyers

If you’re thinking of including a sale-of-property condition in your offer, here are a few things to keep in mind:

Get your home ready first.
Talk to your agent about pricing, staging, and timing before you make an offer on something new. The better prepared you are, the smoother the process of your sale.
Don’t overestimate (or underestimate!) how long it’ll take to sell.
Be realistic about your market and your price point. Guelph homes move quickly in some areas but slower in others.
Stay proactive.
>React to the market: if you are not getting showings, it’s a key indicator that the price is too high and buyers believe they have better options at that price point. Get ahead of it by taking a price reduction- this could mitigate a low ball offer.
Know your finances.
Talk to your lender about bridge financing or other options just in case your timelines don’t perfectly align.
Be ready to move.
>If your house sells and your new deal firms up, things will move quickly — plan ahead for packing, moving, and closing.

Tips for sellers

If you’re a seller considering a conditional offer, don’t automatically rule it out — but protect yourself with these steps:

Always include an escape clause.
This keeps you free to consider other offers if one comes in. It also keeps the pressure on the existing buyer. They need to do what they can to sell the house in the quickest timeframe
Check how marketable the buyer’s home is.
If it’s already listed, see how it’s priced and what the competition looks like. Your agent can help you assess the likelihood it’ll sell. If it’s a niche home (unique design, high price, less desirable location), you should consider this
Limit the time frame.
You don’t want to be stuck in limbo for months. Thirty days is common, but you can negotiate shorter or longer
Keep showing your home.
Even with a conditional offer, keep it active until the deal is firm. This includes running open houses and advertising. Not only will it potential attract a new buyer, it will keep the pressure on the current buyer

Have more questions?

A sale of property condition can be a helpful tool in the right circumstances. This is especially true when the market cools off and sellers are more open to flexible terms. It gives buyers peace of mind and protects them from owning two homes at once.

For sellers, it adds a bit of uncertainty but can still be worthwhile. This is if the offer is otherwise strong and includes the right protections.

Considering making or accepting a conditional offer in Guelph? Make sure you have an experienced local agent in your corner who can guide you. There are many details and timelines to consider!

Sale of property condition- What is it?