Congratulations, you have a conditional offer! What’s does it mean?

Don’t worry, we’ve put together this handy list to make sure that nothing gets missed. A conditional offer is standard practice in real estate sales. Simply put, a homebuyer and seller agree in writing to conditions they consider fundamental to an offer being completed. They set dates to either waive or fulfill the specified conditions in the agreement of purchase and sale.

What Happens Now?

• Certify your deposit cheque and deliver it/have us deliver it to the listing brokerage or go to your branch and have it automatically deposited into the listing brokerages account. (be sure to obtain a receipt).  We will let you know how the listing brokerage prefers to receive deposits and note it must be done within 24 hours of an accepted offer.
• Send the accepted offer to your mortgage agent immediately so they can get started on financing for you.  They will require a copy of the broker full listing as well.  So, provide us with an email address for them and we can send that on your behalf, and we can include the accepted offer as well for you.
• If you’re a first-time home buyer and you plan to use funds from your RRSPs as part of your down payment, the funds must have been contributed at least 90-days prior to withdrawal.
• We will help you schedule a home inspection, if you don’t have a home inspector don’t worry, we have trusted inspectors that we use and we can make the arrangements for you.  We highly recommend that you attend the home inspection so that you can ask the inspector any questions you may have.
• If buying a condo, please let us know who your lawyer will be so that we can send them a copy of the status certificate once we have a copy of it from the listing brokerage.
• Set a date that works for you for a final walk-through before closing so you can get the measurements of the new home so you can plan out how your furniture will fit into your new home.
• Be sure you’re available for signing any documents necessary to either waive your conditions or extend them.  If we submit the documents even one minute past the deadline the deal will be considered dead.  We have created an explanation page below on what the conditions mean so you understand this time period.

Meaning behind Conditions:

Financing:

This allows you and your mortgage agent to make informed decisions. Things like which lender to work and what mortgage rate is the best option for you. If you cannot obtain financing, you will be able to back out of the agreement, usually without penalty. The other component of a financing condition is that the property can have a home appraisal by a lender. This will determine if you paid fair market value for the property. Home Inspection: Like a financing condition, inspection condition gives you time for due diligence. It allows you to properly do a home inspection within the conditional period. You will have a chance to go over the inspection results and potentially price out repairs/ updates.

Status Certificate:

This is only relevant in condominiums or townhouses for sale that are managed by a condo corporation. A status certificate outlines the financial health of the condo corporation. As well, the status certificate gives an overview of the budgeting of major repairs and updates. It also outlines any condo rules that you as the new owner may need to follow.

Sale of Property:

A sale of property condition means that you’re willing to purchase the home. However, it’s under the condition that you have to sell your current home. This prevents you from potentially owing two homes. This condition is typically about 30 days long or so (although negotiable). This allows us ample time to prepare and list their home for sale. If we don’t sell by the deadline. The deal becomes null and void or is renegotiated with a new date.

How Long are Conditions Typically and When Does the Time Period Start?

The standard for a conditional offer is typically five business days or just five days from when a seller accepts an offer. However, this is completely up for negotiation and there is no right or wrong answer. Five Business Days: Monday-Friday does not include weekends and statutory holidays. Five Days:  Sunday-Saturday and statutory holidays are included. Five Business Days will give you a little extra time. The conditional period starts the next business days after acceptance of the offer.  If your offers is accepted on a Sunday the conditional period will start on the Monday.

Waiving:

Waiving conditions is 100% in your control. If we don’t sign a document waiving the conditions by the deadline, the deal is dead.  If your condition is to be waived by 5:00 pm on the fifth business days of acceptance of your offer.  We must have the signed document to the listing agent by that time any time after 5:00 pm on the fifth business day would mean we did not meet the condition and the deal is dead.  Therefore, it’s very important that your available to sign documents before the deadline. The seller cannot force the buyer to waive the conditions.

What happens if we won’t be waiving conditions:

If you cannot obtain financing or the home inspection is not to your satisfaction, we will require you to sign a Mutual Release Form.  Once the form is completed by all parties (buyer, seller, listing agent etc..) the Listing Brokerage will process the return of your deposit.  Please note this can take several business days.  We will notify you when your deposit is ready for pick-up, we can arrange to pick it up for you and drop it off if that works better for you.

We hope you found this information useful. Don’t forget that we’re here to help you through this process! Reach out to your representative or call 289-795-4429.

Christine & team