Purchasing your next home before selling your own: Understanding the "Condition of Selling Your Home First" in Ontario Real Estate

Many of my downsizing clients want to make sure they find the perfect home before they commit to selling their larger family home.

Buying and selling a home simultaneously can be a high-stress balancing act. In the Toronto real estate market, one way buyers mitigate this risk is by including a "Condition of Sale of Buyer's Property" (SOP) in their offer. This clause can be a crucial safety net, especially in a balanced or slower market.  

I often see this in smaller Ontario communities and have recently seen this closer to home, particularly in a cooler market where homes take a while to sell.   I have noticed this recently in retirement communities like Wilmot Creek, too.

What Does it Mean?

An SOP condition means the buyer's offer to purchase a new home is contingent upon the successful sale and closing of their current property within a specified timeframe (often 30 to 60 days). If the buyer fails to sell their existing home by the deadline, the agreement for the new purchase becomes null and void, and the buyer typically gets their deposit back.  

If you're searching homes on MLS and notice "SCE" that's industry short form for "Sold Conditionally with Escape Clause" to notify other potential buyers there is a conditional offer accepted by the seller in place.

A key component often added by the *seller* is an **Escape Clause** (commonly 48 hours). This allows the seller to continue marketing their property. If they receive a more favourable offer, they can notify the original conditional buyer, who then has a short window (e.g., 48 hours) to either waive the SOP condition (making the deal firm, regardless of their old home's status) or walk away.

What Are the Risks for a buyer?

For a buyer, the primary risks are:

• Pressure to Sell:  They must sell their current home quickly and competitively to meet the deadline, which may force a lower sale price.
• Risk of being bumped: If a better offer comes in and the Escape Clause is triggered, they may lose their dream home if they cannot firm up the deal immediately
• The seller will not accept the condition
• Stacking an SOP on other conditions makes it less attractive for a seller

What Are the Risks for a seller?

For a home seller the main risk is uncertainty and time off the market.  Accepting an SOP ties up their property for the conditional period, potentially missing out on other, firmer offers. If the buyer's sale falls through, the seller is back to square one.

While the condition benefits the buyer, the seller can protect themselves by:

1.  Insisting on an Escape Clause: This is your safety net. It allows you to accept backup offers and forces the initial buyer to make a quick decision if a firm offer comes along.

2.  Negotiating a Shorter Timeframe: A 30-day condition is less risky than a 60-day one, as it minimizes the time your property is conditionally sold.

3.  Vetting the Buyer's Property: An experienced agent will assess the buyer's current home—its marketability, price, and readiness—to gauge the likelihood of a quick sale.  An experienced agent may insist that some selling parameters are included in the offer, such as guarantee the seller will accept a specific price, that the home is professionally staged, the home is listed for a certain price and the home is put on the market within a specific time frame

My personal experience:

In a slower market in a rural community, I received a SOP offer.   I reviewed the offer in person with my seller.  The price met their expectations, and the buyers home was currently listed for sale.  As my client was not going to purchase a new home until their home sold, there was low risk. We accepted the SOP (there were other conditions as well) for 30 days with a 48 hour escape clause and the sale firmed up before the 30 day mark, resulting in a successful sale. 

Best Practices: 

Buyers:  Have your current home professionally staged, photographed, and ready to list before making an SOP offer. Offer a competitive price and a shorter condition period to make your offer more attractive.  NEVER remove your SOP condition if another offer comes in without discussing the risks with your realtor and a real estate lawyer. 

Seller: Always include an **Escape Clause** (e.g., 48-hour) in the accepted agreement. Continue to aggressively market your property to attract a firm, non-conditional offer. 

Both: Work closely with an experienced real estate agent and lawyer to ensure the clause is correctly worded to protect your interests and fully understand the Escape Clause mechanism. 

5 Q&A's on Conditional Offers

Q: Can the seller accept another offer while my SOP condition is in place?**

A: Yes, if the agreement includes an Escape Clause. If the seller accepts a new offer, they notify you and give you a short window (usually 48 hours) to remove all your conditions, including the SOP, or walk away.  In the industry we call this 'bumping' the first offer.

Q: If I waive the SOP condition, but my current home still hasn't sold, what happens?

A:  Your purchase becomes a firm, legally binding deal. You are now obligated to close and pay for the new home on the closing date, regardless of whether you have the funds from your old home.

Q: How long is a typical "Sale of Buyer's Property" condition?

A: While that's negotiable, most SOP's I have seen are 30 to 60 days to give the buyer a reasonable window to find a purchaser for their existing property.

Q: Does an SOP condition hurt my offer in a Seller’s Market?

A: Yes. In a strong seller’s market with multiple offers, a firm offer (with no conditions) will almost always be chosen over a conditional offer, even if the conditional offer is for a higher price.  "Stacking" conditions (adding more) makes your offer much less desirable. 

Q:  If the deal falls through because my home didn't sell, do I lose my deposit?

A:  If you fail to meet the condition, your deposit is returned in full.  Both parties must sign a mutual release to detail how the deposit is returned and release both parties from the sale.   A seller may still continue to market & sell the home without a mutual release in place.  

Want to check out some homes for sale in Wilmot Creek?  Call me today at 416-562-5002

I have met a lot of people lately interested in Wilmot Creek.  I thought I'd do a little Q&A here with the 10 most frequently asked questions I get! 

Q:  What's a land lease property?

A:  It's where the land is owned by the development and the individual properties are freehold.    So you pay a rental fee for your land & pay for upkeep and improvements on the house just like you would a freehold home.

Q: I see a monthly fee in the real estate listings - what does that cover?

A: In Wilmot Creek, the monthly fees cover your portion of property tax, your individual water use, maintenance & insurance of all the common elements like the roads and recreational facilities

Q: Is buying a land lease the same as buying a freehold property?

A: In Wilmot Creek, the process is the same (although the forms may be slightly different) . You can buy and sell using your choice of Realtor, for example; and you require a deposit for purchase.  You can conduct a home inspection on the property. 

 Where it differs is that Wilmot Creek requires a 4 day condition of a credit check and an interview before you can finalize your sale.  

Q: In some communities like this snow shoveling and lawn maintenance are included.  What about Wilmot Creek?

A: In Wilmot Creek you need to mow your own lawn and maintain any gardens.  They do plow your driveway in the wintertime

Q: Are there any special taxes I have to pay?

A: The benefit of buying the property but not the land, is you do not pay land transfer tax to the province of Ontario.  This can save you thousands of dollars compared to buying a condo or freehold house on private property.

Q: I think some of the homes look like mobile homes - are they?

A: Homes in Wilmot Creek have been built at different times.  You'll see not only a variety of exterior styles but interior styles, too.  They range from the 'mobile home' style where many do not have a garage or basement, to newer homes with a garage (sometimes double garages) and a full basement.   The newer styles are found in the western portion of the development.

Q: Can you drive a car in Wilmot Creek or do you have to drive a golf cart?

A:  While many homeowners have golf carts, you can absolutely drive a car on the roads! 

Q:  I heard from a friend that you have to turn back a portion of your sale proceeds to the community when you sell, or you have to use their own real estate agent.  Is this true? 

A:  There are a few life lease communities in southern Ontario.  In some communities this is the case, but not in Wilmot Creek.  Real estate is bought and sold in a free market using your realtor of choice.   I know that in some other communities the "fee back to the community" is to contribute back to operating expenses to keep monthly fees low.   

Q: Can you have pets in Wilmot Creek?

A: Yes, Wilmot Creek is a pet friendly community.  You must keep dogs leashed, but there is a dedicated area for dogs to run and numerous walking trails.  

Q: How is owning at Wilmot Creek different than buying at a similar development - say like Swan Lake Village in Markham?

A: At Wilmot Creek, you are purchasing a life lease property.  Swan Lake Village is a condominium development.  Both have monthly fees, but in Wilmot Creek your monthly fees include your portion of property tax. In Swan Lake Village you get a separate property tax bill.  You will have to pay land transfer tax when buying into Swan Lake Village, but because you don't own the land at Wilmot Creek, you don't pay land transfer tax.  Both developments offer a variety of home styles to choose from (although Swan Lake also has low-rise condos and Wilmot Creek only has detached bungalow homes)  Both communities are gated.  Both communities have a great social calendar & superb recreational facilities.  Wilmot Creek also features a 9 hole golf course for members to enjoy.  Both communities have properties with water views (although Swan Lake is a park owned by the City of Markham) 

Interested in properties for sale in Wilmot Creek?

Homes for Sale in Wilmot Creek

Interested in more information about Wilmot Creek?

Why Retire at Wilmot Creek

About Sue Anfang

Working with Sue Anfang - Testimonials

Thinking about downsizing your family home? Here are some excellent options near Toronto; particularly if you live in Scarborough, Pickering, Ajax or Whitby. 

If you're contemplating a move to a smaller, more manageable home, you might be pleasantly surprised by the range of choices available. As a **downsizing specialist in Toronto**, I can help you find the perfect fit. Many retirement communities offer diverse home styles, prices, and ownership structures to suit your needs.  

As a specialist, I've done the work for you so you don't have to! 

Understanding Your Home Ownership Options in Ontario

Why don't you see properties advertised as "55+" condos or "seniors only" in Ontario like they have in other countries? 

It's because property ownership is governed by the Ontario Human rights code, which prevents discrimination.  This means that only certain properties can restrict ownership or occupancy by age. 

However if you’re looking for a home that’s geared to retirees or adult only you can choose a NORC, life or land lease.  

NORCs: (also known as Non Organized Retirement Communities) 

These communities don't have age restrictions but have become popular with retirees over time. They often feature great social activities and amenities geared towards their residents, with amenities sometimes being updated to suit current tastes - think squash courts being converted to Pickleball as a good example. 

Examples include condos at 10 & 20 Guildwood Parkway (Gates of Guildwood) and 1880 & 1890 Valley Farm in Pickering (Discovery Place).  These buidings are notable for being extremely well managed, have spacious suites & beautiful lanscaping and grounds:

It has great recreational facilites including several outdoor pools, clubhouses & tennis courts, plus a large recreational hub the "Swan Club" with indoor pool, gym, meeting areas all overlooking Swan Lake Park. 

Adult 55+ Active Lifestyle Communties

This is a marketing term used to describe communities where age can be restricted.  Often these communities boast premium amenities, like a golf course or putting green.  Anytime you see the word 'lifestyle' there will be the assumption that there is a premium, either to buy the home or for the monthly fees.   

Since 55+ communities, are age-restricted they will be either land or life lease properties.  Wilmot Creek in Newcastle is a great example, where you own the building, and pay monthly fees cover leasing the land your home is build on and access to their great recreational facilities. 

I've written an entire article about Wilmot Creek Here: 

Why Retire at Wilmot Creek

Affordable 55+ Retirement Communities 

If you're looking for an affordable option, there are two life lease properties in Scarborough with units available for under $300,000.  As I write this. And yes you read that right, you can buy a retirement apartment for under $300,000 in Scarborough.  

The first is at 50 Old Kingston Rd.  This low rise complex in Highland Creek features ravine views & an indoor pool.  All the apartments have private balconies or patios & parking.  This is perfect for **snowbirds** who want to keep a place in the city; or people who live at their cottage and just need a landing pad without having to rent something privately.  

The second is on Scarborough Golf Club rd.  Again, this low rise complex has many apartments overlooking the beautiful Cedarbrae Ravine. There's lots of clubs and social activities here.  

Bungalows 

Are you dreaming of a cute bungalow with main floor laundry, an en-suite bath, a walk-in closet, and a garage? There are some great options for you - starting with Swan Lake Village that I already mentioned.   You'll find bungalow retirement communities in Henderson Place in Ajax, and Lynde Creek Village in Whitby. Further east, consider Canterbury Commons in Port Perry or freehold bungalow communities in Coburg or Brighton.

Downsize with Confidence

Compiling information on these great communities has been my focus for years so you don't have to navigate the options alone. The good news is you can unlock the equity from your current family home and still retain the security of home ownership at pretty much any budget. There are great options near Toronto that allow you to remain connected to your family, friends, and community.

If you have questions about **downsizing in Toronto** or want to know more about specific communities, feel free to give me a call.

**Sue Anfang, Realtor**

*Cell: 416-562-5002*

*Website: SueSellsScarborough.com*