Have you ever seen a listing marked SCE “Sold Conditional with an Escape Clause” and wondered what that actually means? It’s not a very common term in real estate but does appear from time to time. Especially in a slower or more balanced market but it’s often misunderstood, so let’s break it down!
So, what does SC escape clause mean in real estate? Keep reading to find out.
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What Is a Conditional Offer?
A conditional offer means that a buyer has agreed to purchase a home, but only if certain conditions are met. These could be one or multiple conditions that need to be fulfilled before the deal becomes firm—meaning locked in with no way out, other than through legal remedies.
Some common conditions include a condition on financing, home inspection, status certificate review or a less common one, sale of the buyer’s home.
Typically, the conditional period lasts anywhere from 1 to 10 business days, with 3 business days being the most common. That’s usually enough time to get a home inspection done and financing in place. During this time, the seller is committed to the buyer—they can’t entertain other offers or sell the home to anyone else.
However, not all conditions are short. When the offer is conditional on the sale of the buyer’s property, for example, it can last much longer—sometimes 30, 60, or even 90 days. That’s where an escape clause often comes into play.
Buying or selling a home in Toronto? Here are a few more posts you might find interesting:
- Home Appraisal Vs. Market Value
- What’s Negotiable When Selling Your Home in Ontario?
- How Much Does a Home Inspection Cost?
So What Is an SC Escape Clause?
An SCE clause (Sold Conditional with Escape Clause) gives the seller a bit more flexibility. If they’ve accepted an offer that’s conditional—especially on something that could take a while, like the buyer selling their home—they’re not completely locked in and can entertain other offers in the meantime!
If another offer comes in that’s more attractive to them, the seller can entertain it, but they have to give the original buyer notice (usually 1-2 business days) to either waive their condition(s) and firm up the deal, or step aside and allow the seller to move on with the new buyer.
This clause is to the benefit of the seller but it can be a win-win: the buyer gets a fair chance to proceed, and the seller doesn’t sit in limbo waiting for a condition to firm up.
Still have questions? Here are a few more posts you might like:
- Should You Compromise When Buying a Home?
- What Happens if You Regret Your Home Purchase?
- Offer Tips for Home Buyers: How to Win in Any Market
What Happens If the Buyer Walks Away?
If the conditions aren’t met and the buyer decides not to proceed, both parties sign a mutual release and the buyer’s deposit is returned in full. They go their separate ways and no harm done (aside from time lost).
The escape clause in real estate is there to protect sellers in longer conditional deals, especially when offers hinge on a buyer selling their own home. It gives sellers the option to pivot if a better or firmer offer comes along, while still giving the original buyer a fair shot.
So, next time you see a property that’s sold conditional with an escape clause, you’ll know it’s still technically in play—and if you’re a buyer, that there still might be a window of opportunity to jump in!
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