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Condition Comeback of the Year: “Conditional Upon the Sale of the Buyer’s Property”
David H. Korman
April 6, 2023
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After going dormant for years, our prediction is that a certain condition will continue make a tremendous comeback and be back in play on many residential real estate transactions in 2023.
After a relatively cool residential real estate market for the past six months due to many factors, including rising mortgage interest rates, inflation, new laws, and employment uncertainty, there is an abundance of Buyers out there looking to make home purchases they had planned before and were forced to delay.
The key point to note is that for many potential Buyers, those purchase plans were delayed but not cancelled!
The conservative advice being given by most real estate agents to Buyers has been to sell first, and then look to buy. That is great advice, however by doing so some Buyers are passing on opportunities to buy their dream homes in the dream neighborhoods when the prospect presents itself. These buyers will likely find that they haven’t yet sold or even started the process of decluttering and staging their current home in order to go to the market.
More and more savvy real estate agents have been countering this dilemma by encouraging their clients to buy first and then sell. The inherent risk in buying first is offset by having the purchase transactions conditional for a reasonable period of negotiated time in order to permit the Buyers to sell their current homes.
Through the persistence and creativity of their real estate agents, otherwise reluctant Sellers are realizing that accepting this condition could be in their best interest. This is especially true if the Sellers are getting their fair market price and their preferred closing date from qualified Buyers, coupled with a satisfactory level of confidence in the plan put in place by the Buyers’ agent for the sale of the Buyers’ property within the conditional period.
We are seeing this condition being introduced into the negotiations more frequently these days. In the current market, this condition will go a long way towards getting more deals done, resulting in “Conditional Upon the Sale of Buyer’s Property” becoming the condition comeback of the year!
David is a member of the Law Society of Ontario since his call to the bar in 1985. David has over 35 years of extensive experience as a lawyer in residential and commercial real estate transactions, commercial leasing, corporate and commercial transactions, and private and institutional lending. His client base includes individuals, business entrepreneurs, developers, financial institutions, brokerages, and real estate investment trusts.
David takes an amiable and dedicated approach to practicing law. His focus is on providing his clients with the highest levels of legal service. Clients love working with David, as he always works hard in their best interests with a smile on his face. David’s sports background and leadership skills are highly influential on the growth and success of Kormans LLP as he truly believes in fostering the Kormans LLP environment as both a family and a team!
When David isn’t closing real estate and corporate transactions, David is an avid runner, hiker and sports enthusiast. However, what David enjoys most is spending quality time with his wife, kids, grandkids and friends at home, at the cottage, and on travels.
David is a frequent blogger, as well as a lecturer and panel member at seminars, webinars and workshops for real estate agents, mortgage brokers and home buyers. Please make sure to catch “David & David on Real Estate” – David’s featured Podcast which can be heard on RadioPublic, Spotify, Breaker, Anchor and Google Podcasts, and can be viewed on the Kormans LLP YouTube channel!
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Discover how Limited Liability Partnerships (LLPs) in Ontario protect professionals like lawyers, accountants, and architects while allowing collaboration, resource-sharing, and individual liability protection.
In this blog post, we will cover in further detail some of the other key items that are important to consider when accepting HST indemnity from the Buyer for the HST self-remittance.
There is an all-too-common misconception by some Buyers and even by some Buyers’ professional, licenced realtors that the time period for the delivery of a Deposit pursuant to a resale Agreement of Purchase and Sale (APS) effectively provides the Buyer with a cooling-off period. The mistaken belief is that the Buyer has until the time and date specified in the APS for the delivery of the Deposit to have Buyer’s remorse for whatever reason and therefore elect to terminate the APS by not delivering the Deposit.
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