In what situation would you use a seller’s condition?

A seller's condition works in the same way as a buyer's condition, such as financing or a property inspection, except that it is for the sole protection of the seller instead of the buyer. A seller's condition can be used for several reasons where a seller needs to accomplish something before being legally locked into the agreement. For the sake of clarity, I have constructed a fictional scenario where the seller's condition can, and should, be used where the seller is selling their primary residence and is concerned that they may not be able to find another property suitable to their criteria. The use of a seller's condition is suited to this situation because it protects the seller from the potential of being forced to sell their home if they don't find another one that works for them.

Let's run through the scenario.

The market in Anytown, Alberta, is considered a busy seller's market, where homes sell fast and for top dollar, and new listings are slow to come on the market. This has led to a low inventory situation and an emerging seller's market.

A seller calls you to list their family home in Happy Hollow because they need to find a new home in the desirable neighbourhood of Mortgage Acres, closer to their new job. At the time of the listing, the seller indicates that they have been searching online for homes on Mortgage Acres, but homes in that neighbourhood are going into multiple offers and selling fast. Mrs. Seller states that they don't want to be homeless or have to rent something and move twice, especially with the new baby on the way. The REALTOR^® belays their fears with optimism that something will come up for them, and if not, they can negotiate some time into the deal to give them additional opportunities to search. The sellers sign the listing, and the property goes on the market.

Within a few days, they have three offers and feel anxiety about accepting one of the excellent offers. Although they have their eye on a property they like, they believe they are going to be in the same multiple offer situation in Mortgage Acres. They ask you, their professional REALTOR^®, if they sign a legally binding offer, could they back out if they couldn't secure the other property at a price they could afford? You rightly explain that once they sign the offer, they are obligated to sell the property once the buyer removes their conditions, however, they could add the seller's condition to allow them the comfort of accepting one of the great offers on the Happy Hollow property, while still giving them the ability to write an offer on the Mortgage Acres property. This way, if they didn't get the Mortgage Acres home, they could collapse the Happy Hollow deal and not be homeless or rent and move twice. The sellers thank you for suggesting this option and add the seller's condition to the contract that says"Subject to the seller being able to secure an acceptable purchase contract on a new home of their choosing on or before 5 PM on July 5, 2021." The buyer's REALTOR^® is not super pleased with the condition, but the buyers want the home and agree to the change, and they all lived happily ever after.

I hope this fictional scenario helps detail one of the many uses of a seller's condition and how there are common scenarios that can help the seller accomplish their goals while still moving forward productively using an additional seller's condition. Although the seller's condition is rare, it is highly effective when the seller needs time to verify or accomplish something and can often lead to a smoother transaction and less potential for liability when the seller feels under pressure.