Understanding Conditional Offers
Thursday Sep 28th, 2017
Chances are, if you’re selling a home, you’ll receive a conditional offer; and if you’re buying a house, you might just make one too. Conditional offers are very common on both sides of real estate whether you are the seller or the buyer – and they are very important to understand.
So, what is a conditional offer? Simply put, it’s an offer to buy a property, but with conditions that must be addressed first.
Condition of Home Inspection
One of the most common conditions we see is a home inspection. This means that the buyer is interested in purchasing your home, but not until they can have a licensed home inspector tour the property to look for latent defects. These are defects or concerns that were not visible or evident when the buyer made their offer to purchase and which might alter their valuation of the property once revealed.
Condition of Financing
Another common condition is financing. This condition comes up when the buyer wants a little more time to make sure they will be approved for a mortgage on the home. Fulfilling the financing condition is usually as simple as returning to the mortgagor and having them begin the final approval process. Should something not go according to plan during the conditional period, the buyer will be protected by the financing condition, which means that the deal will become null and void and that their deposit will be returned.
Other Common Conditions
Depending on the type of property being bought or sold, it’s common to see other types of conditions, like ones that cover everything from septic inspections to condo status certificates and more. But, the point is, these conditions need to be finalized before the house is considered officially sold.
Hire a Realtor
As an experienced real estate sales representative, I deal with contracts and conditions on a daily basis, which means that I understand when (and which) conditions should be used, when they can safely be removed, and how to use conditions to protect my clients, whether they are purchasing or selling a home.