In Alberta real estate transactions, a special clause offer, often referred to as a “Sale of Buyer’s Home clause”, is a condition written into the purchase contract that makes the buyer’s offer conditional on successfully selling their current property within a specified timeframe. This provision is designed to protect the buyer from the financial and logistical risk of owning two homes at once, giving them a window of time to secure the sale of their existing property before committing to their new purchase.
How the “Subject to Sale” Clause Works
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Offer with Conditions – When submitting an offer, the buyer includes a Sale of Buyer’s Home Schedule in the purchase contract. This clearly outlines that the purchase is not firm until their home is sold.
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Defined Timeline – The buyer is given a set timeframe (ranging from a few days to several weeks, depending on negotiations) to sell their property. This period can be critical in fast-moving markets where sellers prefer certainty.
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First Right of Refusal – If another buyer submits an offer while the first condition is still active, the original buyer is typically granted the first right of refusal. This gives them the opportunity to remove their condition and proceed with the purchase—often by securing bridge financing—or allow the seller to move forward with the new buyer.
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Buyer’s Options – If the buyer cannot sell their home within the agreed timeframe, they may:
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Cancel the offer and have their deposit refunded.
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Remove the condition and proceed with the purchase if they have secured alternative financing.
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Key Considerations for Buyers and Sellers
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Risk vs. Reward for Buyers – This clause reduces financial pressure by ensuring they are not left holding two mortgages. However, buyers should understand that including this condition may weaken their offer, especially in competitive or seller’s markets where unconditional offers are more appealing.
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Seller’s Position – Sellers may be hesitant to accept a “subject to sale” condition because their home is effectively tied up during the buyer’s selling period. To safeguard themselves, sellers often add a 72-hour escape clause (sometimes called a “trigger clause”), which allows them to continue marketing the property and accept another offer if the original buyer cannot remove their condition in time.
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Negotiation Points – Key terms can be negotiated to make the deal more balanced, such as:
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The length of the condition period.
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The listing price of the buyer’s home (ensuring it is realistic and marketable).
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The buyer’s efforts in actively marketing their home.
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Professional Guidance is Essential
Because the Sale of Buyer’s Home clause in Alberta can introduce complexity, it is strongly recommended that both parties work closely with an experienced REALTOR® and a real estate lawyer. A well-drafted clause ensures clarity, protects each party’s interests, and prevents disputes if the buyer’s property does not sell as anticipated.
Final Thoughts
A special clause offer in Alberta can be a win-win solution in certain circumstances. For buyers, it provides much-needed security when transitioning between homes. For sellers, it requires careful evaluation and additional protections to ensure their property isn’t unfairly tied up. With the right advice and a properly structured clause, both parties can move forward with greater confidence in the transaction.