Buying a new home is exciting, but it also comes with challenges especially if you still own a property that hasn’t sold yet. For many buyers, the thought of carrying two mortgages at the same time feels overwhelming.
That’s where Annex R comes into play. In Quebec, Annex R can be attached to the promise to purchase, making the deal conditional on the sale of the buyer’s current home. It’s a safeguard that allows buyers to move forward with confidence while giving sellers clear protections as well.
What Is Annex R?
Annex R is an add-on that specifies that the buyer must first sell their existing property before being fully committed to purchasing a new one.
In plain terms: the offer is valid, but it will only go through if the buyer’s home sells within a set period of time.
Key Features of Annex R
- Deadline for Selling
The annex will state how much time the buyer has to sell their property. This could be a few weeks or a couple of months, depending on what the seller agrees to. - 72-Hour Clause (Seller’s Protection)
If another buyer comes along with an unconditional offer, the seller can trigger the 72-hour clause. This gives the first buyer 72 hours (or another negotiated timeframe) to either:- Remove their condition and proceed regardless of whether their home has sold, or
- Withdraw their offer and allow the seller to accept the new one.
- Null and Void if Unsold
If the buyer doesn’t manage to sell their home within the timeframe, the promise to purchase usually becomes void without penalty.
Why Buyers Use Annex R
- Financial Safety Net: Buyers avoid the stress of paying two mortgages at once.
- Flexibility: They can shop for their next property while their current one is still on the market.
- Confidence: It allows them to secure a new home without rushing to sell at a discount.
What Sellers Should Know
From a seller’s perspective, an Annex R offer isn’t as strong as a firm, unconditional one because it adds uncertainty. However, there are still advantages:
- 72-Hour Clause = Options: Sellers don’t have to stop marketing the property and can accept other offers.
- Market Conditions Matter: In a slower market, Annex R can actually help keep deals moving by giving cautious buyers a way to commit.
- Negotiation Tool: Sellers can negotiate deadlines, conditions, and even pricing depending on how attractive the offer is.
Annex R in Practice
Imagine a buyer falls in love with a home in Montreal but still has a condo to sell. Instead of walking away, they submit an offer with Annex R attached. The seller accepts, giving the buyer 45 days to sell their condo.
Two weeks later, another buyer comes in with a firm offer. Thanks to the 72-hour clause, the seller notifies the first buyer. That buyer now has three days to decide: remove their condition and move forward (taking on the risk of owning two properties) or step aside and let the seller accept the new offer.
This system ensures fairness for both sides: buyers aren’t trapped financially, and sellers aren’t left waiting indefinitely.
Annex R is more than just paperwork, it’s a practical tool that makes transitions smoother in real estate. For buyers, it removes the fear of owning two homes at once. For sellers, it provides flexibility through the 72-hour clause while still keeping the deal alive.
Whether you’re looking to upgrade, downsize, or simply move across Montreal, understanding Annex R can help you make smarter, safer decisions when buying or selling a property.