What is an SPP?

In real estate speak this refers to a “condition” in an offer that makes the offer conditional on the Sale of the Purchaser’s Property (SPP) or Sale of Buyer's Property (SBP) which is the same thing. 

In a balanced or Buyers’ market this is a completely normal condition to include if you already own a home that you will need to sell before closing on a new property. Normal but not necessarily easy…


In a Sellers’ market, this kind of condition – or really including any kind of condition, can mean the kiss of death for your offer if you’re competing against an offer that doesn’t include that or other conditions…


When you’re including conditions in your offer, you’re writing them to YOUR benefit. The Seller is looking for an offer that benefits THEM. And that’s what  negotiations are for, to find terms that everyone can agree to…


So let’s break it down!


Advantages to including an SPP condition in your offer:


  • Takes the risk out of the equation for a Buyer who needs to sell their existing home in order to close on a new home
    • Depending on the language of the condition, gives the Buyer an out if they don’t sell their home for the amount of money they need in order to purchase the home they’re offering on
    • The Buyers’ deposit is returned if the condition is not fulfilled or waived


Disadvantages to including an SPP condition in your offer:


  • Can limit your negotiating power
    • When you need the Seller to agree to something that’s not necessarily in their best interest, you can’t be quite as cut-throat in negotiations as you may want to be
    • The seller will want to be compensated for the perceived risk & aggravation of accepting this condition & that translates into $$$
  • The home you have an accepted offer on continues to be marketed & shown to other buyers with the hope that another offer will come in
  • Your accepted offer could get “bumped” by another offer & you will have a pre-determined amount of time to either “fulfill” the condition, “waive” it, or walk away with your deposit
    • Typically an “escape clause” goes hand in hand with an SPP condition & will stipulate how much time you have to respond after receiving notice that another offer has come in. And by respond, I mean, Fulfill, Waive or Walk. Anywhere from 24 to 36hrs is the norm.
  • You will need to be prepared to shift into high gear if your existing home is not already on the market & your offer is accepted
    • Depending on the language in the offer you will need to have your home listed on the MLS by a certain date & you will have a specific amount of time to sell it


That last point is an important one & there are a number of aspects to this part of it!


A savvy Buyers’ Agent is going to first “sell” your home to the Listing Agent & the Sellers, in order to get the SPP condition accepted. Your house is the best thing since sliced bread & it’s going to sell in a hot minute! And here’s why….

  • Detailing a competitive pricing strategy
  • Detailing a solid marketing plan
  • Detailing an attractive timeline


A savvy Listing Agent is going to carefully assess the property themselves to determine how confident they are that the property will be sold within the agreed timeline. If the Buyers’ Agent hasn’t provided all the details, they should be asking for them – if they don’t agree with the details provided, then they would be advising the Sellers that the risk/reward just isn’t there for them to accept the condition.


So what this means is that a Buyer needs to have all their ducks in a row prior to making an offer if they know that they will want to make it conditional on selling their existing home. This is not the time to start prepping the house for sale or “trying out” a higher list price than what their Agent has suggested…those things need to have already been done & a specific agreed-upon plan in place that’s just waiting to get executed!


At the best of times real estate is a high stakes, sophisticated business & adding an SPP condition into the mix takes it up yet another notch…but if everyone is on the same page, well prepared & working with a high degree of professionalism, this is a scenario that can be navigated successfully for everyone involved! We'll just gloss over the nail biting, teeth gnashing & possible day drinking that the agents behind the scenes are doing trying to make it all come together seamlessly, lol! ;)


All that being said, if you don’t like the idea of the Seller having you by the “short & curlies” in a balanced market, then the answer to that is to sell your home first! You will know how much money you have to work with, you will already have a closing date to work towards (or arrange bridge financing for) & you will be on your own timeline & terms! The only fly in this ointment is that it’s a bit of a leap of faith that the right house will be available, at the right time, so that you don’t end up homeless or settling for a house that’s not “the one”. And this is what makes this scenario not right for everyone…


There are only 2 choices & you have to decide which one you feel most comfortable with…pick your poison!


Until next time,

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