What Is a Subject to Sale Offer?

Last week we reported that while Western Australia is still leading the country in terms of growth, we’ve seen a slowdown in both the pace of growth and the speed at which properties are selling (average days on market in December was 15 days, up from as low as 8 days for much of 2024).

As well as a slowing of pace of growth and sales, we’ve also experienced an increase in “subject to sale” condition on offers.

So it’s no surprise that REIWA also recently noted a growing curiosity about “subject to sale” offers. So, we thought it might be helpful to explain – for both buyers and sellers – the basics of what you need to know about a “subject to sale” condition on a contract.

The “subject to sale” condition is a little tricky as it as can give buyers the breathing room they need to sell their current home to purchase their next one, while also allowing sellers to keep their options open.

So how does a subject to sale offer actually work in practice? And what should buyers and sellers understand before agreeing to one? Below we explain how these contracts operate, including the common conditions involved and what they mean for both parties in today’s market.

How Subject to Sale Offers Work

A subject to sale offer is a conditional agreement to purchase a property that is dependent on the successful sale of the buyer’s existing home. The contract proceeds only if the buyer sells their current property within an agreed timeframe. This condition allows the buyer to secure a new property while reducing the financial risk of owning two properties at once or needing bridging finance.

Picture this: you’ve found your dream home, but you need to sell your current property first to fund the purchase. A subject-to-sale offer allows you to secure the new property on the condition that your existing home is sold. This arrangement gives buyers time to sell their current property while reducing the financial risk of owning two homes.

For sellers, it provides flexibility. They can accept the conditional offer while continuing to market the property, allowing them to consider other offers that may be more favourable if they arise. A “better” offer does not necessarily mean a higher price. It may simply involve stronger terms or fewer conditions.

The “Two-Day Special Condition” Clause

One key feature of these contracts is they often include the “two-day special condition clause” (often referred to as the “48-hour clause”).

How a Two-Day (48-Hour) Special Condition Clause Works

1. Buyer One has their offer accepted, subject to the sale of their property by a certain date. The owner of the property can continue to market their property for sale and accept another offer from Buyer Two that is not subject to the sale of a property: a cash or subject to finance offer.
2. A New Offer Arrives: Buyer Two submits an offer that is acceptable to the owner, and not subject to the sale of another property. The seller can accept that offer subject to Buyer One’s offer not proceeding.
3. Once the seller accepts Buyer Two’s Offer: They must issue a “Seller’s Notice” that gives buyer one two clear business days to make their offer unconditional. This is frequently referred to as invoking the “48-hour clause” – which is actually the seller’s notice triggering the two business day special condition.
4. The Countdown Begins: Buyer one is notified by seller’s notice and has two full business days (until 4pm on the second full business day following the notice) to decide: either proceed unconditionally by removing the subject to sale condition or step aside.
5. The Outcome: If buyer one proceeds, the subject-to-sale special condition is waived and the contract proceeds (and may or may not still be subject to other conditions). If not, buyer two’s contract proceeds.

• Ensure you offer a solid price for the property you are seeking to purchase Subject to Sale given the strength of the market. Some sellers will accept a Subject to Sale offer if the price is right over a lower cash or subject to finance offer
• Ensure the Subject to Sale property is ready to go to market. Having the property ready to sell market prior to making your offer will make your offer more appealing
• Having a reputable agent with a strong marketing strategy for your property and competitive pricing will increase your chances of a quick sale

• Be clear on the specific terms of the subject to sale clause and whether you can accept another offer
• Be clear on the length of time you are providing for the subject to sale property to sell
• Gain an understanding through your agent of the pricing expectations for the Subject to Sale property to understand the likelihood the Subject to Sale property will sell