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. For example, a conditional offer may depend on:
  • obtaining mortgage financing
  • a satisfactory professional home inspection report
  • or reviewing a condo corporation status certificate.

What Happens Now?

  • We will arrange to order the status certificate if necessary.
  • Inform your lawyer that you have a conditional offer.
  • Ensure that when the home inspection is scheduled that you have arrangements to be away from your home for at least 2-3 hours that is generally how long they will take.
  • Please obtain the cleaning and upkeep of your property during this time and we advise that you continue to allow showings to happen.

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. 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.

Can a buyer walk away from deal and if so why?

 The short answer is yes, and the deal would end up going to mutual release and the buyer would get their initial deposit back.  Here are some of the reasons why a buyer may end up wanting to go to mutual release. This is why we advise that we continue to show your property during this time period.  We will do everything we can to ensure that all conditions are met but sometimes deals do fall apart.

Home Inspection Report.

Professional home inspectors can spot defects. Filling in a seller information property sheet (SPIS) prevents most nasty surprises during a home inspection.

Mortgage Didn’t Materialize.

Sometimes Buyers do not arrange to have a mortgage pre-approval before putting in offers and only find out during the financing condition that they do not qualify for the purchase amount they had anticipated. We always ask the buyer agent beforehand if their client has a pre-approval but this is not something they’re obligated to provide us with.

Current Home Didn’t Sell.

Regardless of who made a conditional offer subject to sale of another home, not meeting that all-important deadline to sell may force cancellation of a conditional offer.

Unsatisfactory Status Certificate Review.

Condominium corporation not setting aside enough for future expenses can be considered a red flag when the buyer’s lawyer is reviewing the status certificate. 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