Selling Your House For Dummies
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In Canadian real estate contract negotiation, subject to clauses are a home buyer’s safety-hatch – a way to escape the contract if something goes wrong. Three of the most common clauses on an offer to purchase are subject to financing, subject to inspection, and subject to sale:

  • Subject to financing clauses don’t offer much room for negotiation. Buyers can’t remove this subject clause during the offer/counteroffer process, unless perhaps they have a lot of equity, and don’t really need a mortgage, or require a relatively small and easy-to-get-fast mortgage. Remember, if the buyer didn’t need a mortgage, she likely wouldn’t have made the offer subject to financing in the first place.

  • Subject to inspection clauses are commonly included in a buyer’s offer to purchase a home. Since it should take no more than two or three days to arrange an inspection, this is an easy clause to negotiate. As with the financing clause, though, you can try to negotiate a shorter time period for the inspection’s completion to speed things up.

  • Subject to sale clauses can be negotiated with regard to the length of time you give your buyers to sell their current home. Any buyer who already owns a home probably can’t afford to carry the expense of two homes at once. Still, no matter how anxious you are to move, allow the buyer a decent amount of time to list and sell his home.

    Usually four to six weeks is considered fair. Most sellers will include a “time” clause, so that if another suitable offer comes along during that time, the seller can activate that clause -- meaning that the buyers with the accepted offer have a set amount of time (often 24 to72 hours) to remove the subject to sale clause or drop out of the contract and let the competing offer proceed.

About This Article

This article is from the book:

About the book authors:

Eric Tyson, MBA, is the author of Investing For Dummies, Personal Finance For Dummies, and Investing in Your 20s and 30s For Dummies. Ray Brown, a real estate professional for more than 40 years, is the best-selling co-author of Home Buying For Dummies. Ray Brown is a real estate professional with more than four decades of hands-on experience and a public speaker on residential real estate topics.

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