Removing Subjects...Literally

Today I want to discuss the prevailing new method of writing offers on wanted property - subject free.

'Subjects', are the conditions made by a prospective buyer within their offer on a property. In a normal marketplace, upon the agreement between a buyer and a seller on an offer, the buyer goes through what is known as the 'subject removal period'. This typically lasts one week. Subject clauses represent the safeguards for buyers prior to finalizing the purchase of a home, often the largest single transaction in one's life.

So how do subjects protect buyers? These protections help to ensure that you are able to get financing from your lender (as a pre-approval is not a guarantee), verify the condition of the home with a home inspector, and review the documentation from the strata council to prevent any surprises from arising later on. Most importantly, they allow the opportunity for the buyer to catch their breath and think through their decision. This time period is the chance to rationalize the purchase and review the home without the pressure of negotiation.

Fast forward to the market we are in.

Subject free has become the norm. It is all but expected that a buyer's offer does not contain subjects should a property have any desirability. In fact, sellers are receiving several offers, all subject free.

This new reality essentially removes the safety net for the buyer. To ensure that you are committed, sellers are also expectant of a bank draft in the amount of 5% - 10% of the purchase price as a form of deposit. When is that deposit due? With the offer! This deposit can be extremely tricky to get a refund on, say, should your lender reject financing the property!

So what do I do?

In today's market, the reality is that you may have to present a subject free offer to get the home you want. Here are a few tips on how to protect yourself while going subject free:

  • Obtain and read all documents before writing the offer. A prudent agent will read through all of the documentation for a building or house. Some of the more important ones are:
    • Form B + Information Certificate, Financial Statements - these documents explain how healthy the reserve fund is for the strata, the financial health of the strata, whether the current owner owes any money to the strata corporation, and whether the unit comes with a parking stall and/or storage locker.
    • Depreciation Report - a professionally conducted check-up on the building along with a 30 year recommended plan of repairs, maintenance, and renovations. This is often helpful to see when major expenses may be coming so there are no surprises down the road.
    • Property Disclosure Statement
    • Title Search
    • Minutes from the Strata Council
  • Bring a home inspector to your showing
  • Ensure you are pre-qualified/pre-approved for the mortgage you will need - double and triple check!

To learn more about what's happening in the Lower Mainland Real Estate scene, and how to protect yourself even with subject free offers, email me at

All the best,