Article by Connor Tait                                                                                                                                                                                                                                             

5 Min Read                                                                                                                                                                                                                                                                Article by Connor Tait                                                                                                                                                                                                                                             

                                                                                                                                                                                                                                                                  

Subject to Sale: Pros, Cons & Alternatives for Buyers & Sellers

Buying and selling property can be a juggling act, especially when you need to sell your current home before purchasing your next one. A common strategy to manage this transition is making an offer subject to sale, but this approach has both advantages and drawbacks for buyers and sellers alike. Below, we break down the pros and cons of subject-to-sale offers and explore alternative options such as unconditional purchases and bridging finance.

What is a Subject to Sale Offer?

A subject-to-sale offer means a buyer can secure a new property on the condition that they successfully sell their current home within a specified timeframe. If they do not sell within this period, they can withdraw from the purchase without penalty.

Buyer’s Perspective: Pros & Cons

✅ Pros for Buyers:

  • Reduces Financial Risk – You will not be committed to two mortgages if your home does not sell in time.
  • Gives You More Time – Allows you to secure a new property before finalising the sale of your current home.
  • Minimises Stress – Avoids the need for interim accommodation if settlement dates align perfectly.

❌ Cons for Buyers:

  • Less Attractive to Sellers – Vendors prefer unconditional offers, which means you may miss out on your dream home to a more competitive buyer.
  • Risk of Being Gazumped – If another buyer submits an unconditional offer, the seller may give you a short time to go unconditional or risk losing the deal.
  • Potentially Higher Price Negotiations – To offset the uncertainty, sellers may be less flexible on price or may not accept subject-to-sale offers at all.

Seller’s Perspective: Pros & Cons

✅ Pros for Sellers:

  • May Attract More Buyers – Some buyers can only purchase if they sell first, so allowing subject-to-sale offers could open up a larger pool of potential buyers.
  • Provides a Potential Buyer – If your home has been on the market for a while, this could be a way to secure interest.
  • Can Include a 'Time Clause' – This allows sellers to keep marketing their home and accept a better offer if one comes along.

❌ Cons for Sellers:

  • Uncertainty in the Sale Process – The deal is not secure until the buyer’s home sells, which can delay your plans.
  • Limited Market Exposure – While under a subject-to-sale contract, other buyers may be hesitant to engage with your listing.
  • Possible Price Reductions – If the buyer struggles to sell their home, they may seek an extension or renegotiate the price.

Alternatives to Subject to Sale Offers

For buyers and sellers looking for a smoother transaction, there are alternatives to consider:

1. Going Unconditional & Backing in Your Sale

This means purchasing a new property without the sale condition, assuming your home will sell in time.

✅ Pros:

  • Stronger negotiating power with the seller.
  • More certainty in securing your new home.
  • Avoids the risk of losing out to unconditional buyers.

❌ Cons:

  • If your home takes longer to sell, you could be left juggling two mortgages.
  • More financial pressure to meet settlement deadlines.

2. Bridging Finance

A bridging loan is a short-term loan that covers the gap between buying your new home and selling your existing one.

✅ Pros:

  • Allows you to buy your next home without waiting to sell.
  • Gives more flexibility and time to achieve the best sale price.
  • Reduces stress and allows for a smoother transition between homes.

❌ Cons:

  • Additional interest costs and loan fees.
  • You need to be financially approved for both loans.
  • Risk if your current property takes longer to sell than expected.

Which Option is Right for You?

Choosing between a subject-to-sale offer, going unconditional, or using bridging finance depends on your financial position, market conditions, and risk tolerance. If you are in a strong seller’s market where homes are selling quickly, going unconditional or using bridging finance might be a better strategy. However, if the market is slower or your home may take longer to sell, a subject-to-sale offer could be the safer option.

If you are unsure which approach suits your situation, let’s have a chat! I can provide insights into current market trends, buyer competition, and the best way to structure your property transaction for a smooth and successful outcome.

📞 Call our agency on 0493 674 245 to discuss your buying and selling needs