It is just as simple as it sounds. A conditional offer is an offer with conditions that must be met within a specified time. Once the conditions are met and/or waived, then the offer will become a firm offer and it is no longer conditional. If the conditions are not met within the specified time frame, the offer will become null and void and the deposit will be returned to the buyer (if that is specified in the conditional offer).
Some conditional offers state that once the conditions are satisfied/met, the conditions are to be “waived”. When a condition is waived, it means that the buyer must be notified (usually in writing) that the condition has been satisfied/met. Some offers will state that if the buyer does not hear back, then the conditions have been satisfied.
Dates and deadlines are crucial with conditional sales. There is typically no getting out of an agreement if one party has changed their mind. However, if a date or deadline is missed, even accidentally, the agreement is null and void which can be helpful for the person wanting to reconsider the sale.
What are the most common conditions included in offers?
Conditional on Financing
A buyer may include a financing condition in their offer for a variety of reasons. One of the main reasons is that they may not have the cash available to purchase the property outright, and will need to obtain a mortgage or another form of financing in order to complete the transaction. By including a financing condition, the buyer can ensure that they will not be held responsible for completing the purchase if they are unable to secure the necessary financing. Additionally, a financing condition can give the buyer more time to shop around for the best financing options and negotiate favourable terms. Ultimately, including a financing condition in an offer can provide the buyer with some protection and flexibility when it comes to completing the purchase of a property.
Conditional on Home Inspection
A buyer may include a home inspection condition in their offer to protect themselves from potential issues that may not be visible during a regular viewing of the property. A home inspection can identify hidden problems, such as structural issues, mould or leaks, that may not be apparent to the naked eye. If the inspection uncovers any major problems, the buyer can either negotiate with the seller to address the issues or decide to forego the deal altogether. A home inspection can also provide the buyer with peace of mind and help them make an informed decision about the property they are interested in purchasing. By including a home inspection condition in their offer, the buyer can ensure that they are not taking on any unexpected and potentially costly repairs after closing the sale.
Conditional on Sale of Purchaser’s Property
If the buyer needs to sell their current home in order to secure the funds for the purchase of a new property, they may include a condition on the sale of their own house in their offer. This condition can provide the buyer with some peace of mind as they can be confident that they will have the funds to complete the purchase before committing to the transaction. Including this condition can also help to avoid any potential financial difficulties or legal issues that may arise from purchasing a new property before selling the current one.
Conditional on Status Certificate
A buyer may include a condition on the review of the status certificate in their offer when purchasing a condominium unit. A status certificate is a document that provides important information about the financial and legal status of the condominium corporation, including any outstanding fees, legal disputes, or other potential issues that may affect the property or its value. By including a condition on the review of the status certificate, the buyer can ensure that they have a clear understanding of the current state of the property and the condominium corporation before finalizing the purchase. This can help to avoid any potential legal or financial issues that may arise from purchasing a property with outstanding fees or other unresolved issues. Overall, including a condition on the review of the status certificate can provide the buyer with peace of mind and ensure that they are making an informed decision about their purchase.
In simple terms, a conditional offer has certain terms that the buyer or seller must meet during the conditional period. If the conditions are not met, the deal becomes null and void and the seller can accept another offer.