When making an offer on a house, there are several crucial factors to consider, and two common conditions you might encounter are "subject to finance" and "subject to sale." Understanding the difference between these conditions and how they can impact your offer is essential for a successful property purchase. In this blog post, we'll break down what "subject to finance" and "subject to sale" mean and their implications.

Subject to Finance:

• Definition: Making an offer "subject to finance" means that your offer is contingent on you securing a mortgage or loan to purchase the property. If you cannot obtain the necessary financing within the agreed-upon timeframe, the offer becomes void, and you are not obligated to proceed with the purchase.

• Importance: Including a "subject to finance" condition protects you from entering into a contract you cannot fulfil financially. It gives you time to arrange your mortgage and ensures you won't be stuck with a property you can't afford.

• Process: After your offer is accepted, you typically have a set period (e.g., 14 to 21 days) to secure financing. During this time, you'll work with your lender to finalise your loan application and receive a formal loan approval.

Subject to Sale:

• Definition: Offering "subject to sale" means that your offer depends on the successful sale of your current property. If you can't sell your existing home within the specified timeframe, your offer is void.

• Importance: This condition allows you to buy a new property while still living in your old one. It's especially useful if you're upgrading or moving to a different location and need the proceeds from your current home's sale to fund the purchase of the new one.

• Process: Once your offer is accepted, you'll have a designated period (e.g., 30 to 60 days) to sell your current property. During this time, you'll actively market your home and aim to secure a buyer.

How These Conditions Affect Your Offer:

• Competitiveness: In a competitive market, offers with fewer conditions may be more attractive to sellers. A "subject to finance" or "subject to sale" condition can make your offer less appealing, so it's crucial to strike the right balance.

• Negotiation: The inclusion of these conditions can provide room for negotiation. For instance, you may negotiate a longer "subject to finance" or "subject to sale" period to allow for a smoother process.

• Risk Management: These conditions offer protection and flexibility for buyers. They help you avoid financial strain and ensure you don't end up owning two properties or none at all.

• Clear Communication: It's essential to clearly communicate your intentions and timelines with the seller to maintain transparency and build trust during the negotiation process.

In summary, "subject to finance" and "subject to sale" conditions can significantly impact your property offer. Carefully consider your circumstances, market conditions, and the seller's preferences when deciding whether to include these conditions in your offer. Consulting with a real estate agent or legal advisor can provide valuable guidance in making the right choice for your situation.