Should I Hold Out for a Subject-Free Offer on my Home?
Q: I’ve received an offer at an attractive price, but that is subject the buyer selling their home. Given that subject-free offers were the norm recently, should I consider this offer?
A: Markets change, and real estate booms can end overnight. We’ve seen that in Vancouver in recent months, even before the foreign buyer tax was implemented the market had slowed to a crawl. Most real estate insiders are thankful for the shift, as a stable market is better for those who work with both buyers and sellers. But this change does bring up a new set up challenges that a lot of clients are no longer used to. And when a seller has a scenario for their listing in mind it’s very hard to get them to agree to the reality of a market they are not used to.
If the offer is at a price that you consider to be reasonable then absolutely you should consider it, and property accept it. What’s the alternative: let your home sit on the market indefinitely? Consider that detached home sales have gone down substantially in the last month, so if you are prepared to let your home sit on the market to achieve an offer at a value that is comfortable there is nothing wrong with an accepting an offer with a subject to sell. If the offer collapses, then both scenarios are basically identical. If the offer completes, you’ve got your asking price and you can move on.
When a market shifts, buyers and sellers need to shift with it. Because we are leaving a sellers’ market and entering into a more balanced market, sellers need to be more patient and flexible if they want to sell for maximum value. This can take a while, but reality will sink in before long. Gone are the days of multiple offers within 24 hours of the open house on every single listing, we are faced with a more traditional market and level playing field. It’s important for you, the seller, to be mindful of this reality.
There is always an opportunity in every real estate scenario. Your opportunity here, as the seller, is to instruct your agent to solicit back-up offers to put pressure on the buyer. He or she should already be doing this, but if there is any resistance they are always obligated by law to follow your instructions. If you are able to secure a backup offer during this time, that’s great you’ve got a second option. If not, your realtor should still be able to generate a lot of leads of interest should the first offer collapse.
The market has shifted as it does every time a boom reaches its maximum, especially in the $1.5 million and above price range. So if you want to sell for a decent amount, you are likely going to have to reverse your thinking and be patient moving forward. An offer with a subject to sell the buyers home might not be the ideal situation, but it very well could be the best offer you receive.