Handling Conditional Offers

For Sale by Owner


Handling Conditional Offers When the Buyer Needs to Sell Their House First

Handling conditional offers when you are selling for sale by owner might seem like a daunting task.


Let's set the scene. "I am going to sell my house privately" you have announced to everyone. Everything so far has gone smooth.


A buyer that viewed your house last evening is now sitting at the kitchen table with you, contract in hand.


By the way, if you are looking for a good source to find for sale by owner real estate contract forms, may I suggest you check out the following: For Sale by Owner House Real Estate Contracts

Great! You look over everything carefully and it all looks fine. The price is right, closing date good, the subject to lawyer review clause is inserted. Looking good to sell!


Then you see the extra attached form with the clause concerning the Subject to the Sale of the Purchaser's Property.


I promised you that I would try to cover everything that could occur in a for sale by owner situation and this, is just another example which will cover handling conditional offers.


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Handling Conditional Offers

Should I Even Consider a

Subject to Sale of Purchaser's Property?


The good news? ABSOLUTELY!


I personally believe, you actually have an advantage accepting an SPP when you are faced with handling conditional offers.


Here is why. First, keep in mind that this is based on my experience when I was a real estate agent, so there is a chance that in your area, the rules may be different, or the rules may have changed.


When a real estate agent receives an SPP, they are required to report that offer to the real estate board, when they are a member of said board.


You on the other hand as a for sale by owner, do not. Follow? OK, in case you don't catch the significance of this, let me try to explain.


Do as I Say, Not as I Do


Once the real estate agent has reported the SPP to the MLS® board, within a short period of time that information is transmitted to all the board members.


All the real estate agents now know there is an SPP contract on the property.


In a perfect world, that should mean absolutely nothing. Why? All the agents should continue to show the property in question until perhaps one of their buyers puts in an offer.


At that time, if accepted, they wait for the condition to be released, or the first buyer makes their contract firm and binding.


Now, I said a perfect world. My experience? Don't happen that way. Here is what usually happens.


  • A certain percentage of real estate agents show the property.


  • A certain percentage of agents tell their clients. "Oh, that property has an offer on it. There is no sense in viewing that house".


  • A certain percentage of agents don't even report the SPP. I don't really blame the agents that do this because they do it because of the 2nd point above.


The problem is, they are breaking the real estate rules. This type of tactic then becomes unfair to the real estate agents that show the house, without knowing there is a conditional contract in place.

Red and white for sale and sold sign with conditional


Now, Your Advantage Handling Conditional Offers as a For Sale by Owner


You, by selling your house for sale by owner, have absolutely no obligation to tell anyone, that you have a conditional contract in place until they actually bring you their contract. In fact, may I suggest you just keep quiet about the SPP.


When a purchaser puts in a SPP bid, unless they receive an UNCONDITIONAL offer on their property, they will probably have to release the property to the 2nd buyer that doesn't have a house to sell.


If the 2nd bid is also a SPP offer, you can accept that offer as well, subject to the release of the first SPP.


If the 2nd SPP bid receives an unconditional offer on their house first, they can lift their condition subject to the first buyer releasing their contract.

Real estate contract with big red canceled


Clear as Mud?


  • This can seem a bit confusing at first during a sell my house privately transaction, so I'll try to put it in a list form.

  • Buyer #1 puts in an offer subject to sale of house #1.

  • Buyer #2 puts offers after buyer #1, subject to sale of house #2.

  • Buyer #2 receives an unconditional contract on house #2.

  • You inform buyer #1 of the offer from buyer #2 and the clock starts ticking. You had a clause inserted that buyer #1 had say 24 or 48 hours to either, make their offer firm and binding, or release the house to a second buyer.

  • Buyer #1 has no offers on their house and makes their offer null and void Buyer #2 is now free to close the deal.

  • Buyer #2 becomes the proud owner of your house, you sell your house for sale by owner and receive your funds at closing.

  • You calculate the huge savings of selling your house for sale by owner by not having to pay a real estate broker a big fat commission.

  • You go to your favorite restaurant for a celebration dinner because you had the knowledge about handling conditional offers.


A Visitor's Comment


I'm not selling my house yet, but I just wanted to thank you for sharing your wealth of experience on this website.

I'm learning so much. Thank you! and have a good weekend.




The SPP Clause


I will not write out an actual SPP clause that you might use when handling conditional offers.


I suggest you obtain the proper forms or clauses from one of the sources I listed at Where do You Acquire these Forms


I will suggest it should cover the following:


  • Subject to the unconditional sale of Purchaser's Property.

  • The address of the property to sell.

  • The date the property is to sell by.

  • What happens if you the seller, receives another offer conditional, or unconditional. This should include notification to Purchaser or Purchaser's Lawyer.

  • The time frame the Purchaser has to either remove the condition or null and void the contract. Make this short, perhaps 24 or 48 hours from notification.

  • What happens to the Purchaser's deposit if contract deemed null and void. Normally returned in full.

This is just a rough outline of this handling conditional offers page, should you decide to write the clause yourself.



Does the 2nd Offer have to be Better?


Short answer: No.


Just be Careful


When you are selling a house for sale by owner, you need to take some precautions. When you are handling conditional offers you should be even more careful. Of course I have a solution. :)


Make sure that you include a subject to lawyer approval clause (link below for wording) and have your real estate lawyer review the contract in the time frame stated in the clause.


Just to refresh you go to; Subject to Lawyer Approval Clause


Back already?


Just ALWAYS include that clause when you sell for sale by owner you just read on the other page, OK?


  • One for you, the Seller.

  • One for them, the Buyer.

If you secure the services of a residential real estate lawyer, when you sell for sale by owner and have him or her go over the contract with you, there should be no reason for concern.


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