Can I Buy a New Home Before My Current Home Sells? Understanding SOBP

What is SOBP (Sale of Buyer's Property)? "My current home hasn't sold yet, but can I still make an offer on a new one?" This is one of the most common questions buyers ask. "I found my dream home, but my current house hasn't sold yet." "If I wait until my home sells, someone else might buy it. But if I buy now, what happens if my home doesn't sell?" This is exactly the situation where a Sale of Buyer's Property (SOBP) condition can help. An SOBP (Sale of Buyer's Property) is a condition that allows a buyer to purchase a new home only if their existing property is sold first. It protects buyers from the financial risk of owning two properties at the same time. In Nova Scotia, this condition is typically added to the Agreement of Purchase and Sale using Form 430A – Sale of Buyer's Property Schedule. When is an SOBP Used? An SOBP is commonly used when: The buyer needs the proceeds from their current home for the down payment. The buyer cannot comfortably carry two mortgages at the same time. The buyer's existing home is still on the market or under a conditional sale. The buyer is upsizing or downsizing and needs to sell before purchasing. How Does an SOBP Work? Step 1 – Buyer submits an offer with an SOBP condition The buyer makes an offer stating: "This offer is conditional upon the successful sale of my current property." ↓ Step 2 – Seller accepts the conditional offer The Agreement of Purchase and Sale is signed, but it is not yet a firm deal because the buyer's property has not been sold. ↓ Step 3 – Seller continues marketing the property This is one of the biggest misconceptions. Accepting an SOBP offer does not mean the property is taken off the market. The seller may continue to: Keep the property listed Schedule showings Hold open houses Accept other offers ↓ Step 4 – Another buyer submits a better offer If a stronger offer is received, the seller may deliver Form 430B – Notice to Buyer to the first buyer. ↓ Step 5 – The first buyer must make a decision The buyer typically has 24 to 72 hours (or whatever time is specified in the contract) to choose one of the following: ✅ Option 1 Remove the SOBP condition and proceed with the purchase, making the contract a firm deal. OR ❌ Option 2 Allow the agreement to terminate and receive the deposit back in accordance with the contract. This is commonly known as the Escape Clause. Advantages for the Buyer 1. Reduces Financial Risk Without an SOBP, the buyer may end up paying for: Two mortgages Two property tax bills Two sets of maintenance costs An SOBP helps avoid this situation. 2. Gives the Buyer a Chance to Secure Their Dream Home Instead of waiting for their current home to sell and risking someone else buying the property first, the buyer can make an offer immediately while still protecting themselves. 3. Provides Peace of Mind If the buyer's home does not sell, the agreement can generally be terminated according to the contract terms, reducing financial pressure. Disadvantages for the Buyer 1. The Offer Is Less Competitive From the seller's perspective, there is uncertainty because the buyer's purchase depends on another property selling first. In a competitive market, sellers often prefer unconditional offers. 2. The Buyer May Receive Short Notice If another buyer submits a better offer, the seller may issue a 430B Notice requiring the buyer to remove the SOBP condition within a short period. 3. A Major Financial Decision May Need to Be Made Quickly If the buyer receives a 430B Notice before selling their home, they may have to consider: Bridge financing Additional cash resources Alternative financing options to complete the purchase. Advantages for the Seller 1. Secures an Offer In a slower market, a conditional offer is often better than having no offer at all. 2. Marketing Can Continue The seller can continue: Showings Open houses Advertising Accepting additional offers while waiting for the buyer's property to sell. 3. The Seller Keeps Their Options Open Thanks to the Escape Clause, if a stronger offer comes along, the seller can require the first buyer to remove the SOBP condition or allow the agreement to end. Disadvantages for the Seller 1. The Transaction May Never Close If the buyer's property never sells, the purchase agreement may terminate. 2. Timing Becomes Less Certain Closing dates and moving plans may depend on when the buyer successfully sells their existing property. What About Another Buyer? Many people ask: "Can I still submit an offer if there's already an accepted conditional offer?" Yes. In many cases, another buyer may submit a Back-up Offer. If the first buyer is unable to remove the SOBP condition after receiving a 430B Notice, the seller may then proceed with the second buyer. Advantages for the Back-up Buyer They don't have to walk away from a property they love. If the first deal falls through, they may already be in a strong position to purchase. In many cases, negotiations do not have to start over. Disadvantages for the Back-up Buyer They must wait for the first buyer's decision. If the first buyer removes the SOBP condition, the Back-up Offer will not proceed. Real-Life Example John owns a home worth $600,000. He wants to purchase a new home listed at $800,000, but his current home has not yet sold. He submits an offer with an SOBP condition: "I will purchase this home once my current property is sold." The seller accepts. A few days later, another buyer submits a stronger, unconditional offer. The seller sends John a 430B Notice, giving him 48 hours to decide. John now has two choices: Remove the SOBP condition by arranging bridge financing or other financial resources and proceed with the purchase. OR Allow the agreement to terminate and receive his deposit back according to the contract. Key Takeaways Buyer Seller Back-up Buyer Protected until their existing home sells Secures a conditional offer Can submit a Back-up Offer Reduces financial risk Can continue marketing the property May proceed if the first deal falls through Opportunity to secure a desired home early Retains flexibility if a better offer arrives May need to wait for the first buyer's decision Offer may be less competitive Risk that the transaction may not close No guarantee the property will become available Final Thoughts An SOBP (Sale of Buyer's Property) is a valuable tool for buyers who need to sell their current home before purchasing another. At the same time, it protects sellers by allowing them to continue marketing the property and accept competing offers through the use of an Escape Clause. Rather than simply being a "conditional offer," an SOBP is designed to balance the buyer's financial protection with the seller's ability to keep their options open. Because the outcome can depend on details such as the condition period, notice requirements, financing arrangements, and contract wording, buyers and sellers should always discuss their specific situation with their REALTOR® before proceeding.