Offer Conditions Are Back!
Siemens Home Team
Wednesday, February 8, 2023
CONDITIONS ARE BACK!
Are you a Buyer uncertain of buying in the last two years or more because of the proliferation of a no-condition offer? Or are you a Seller worried that conditions in an offer will “tank the deal”?
Here are some conditions that you would want to see in an offer and what that means for the buyer and the seller:
. Financing Condition:
even if a buyer is pre-approved this does not mean the lender will give them the needed funds for the property on closing day. For a seller this would be the worst way to find out that the buyer cannot get financing because of a lower-than-expected bank appraisal or because some details were missed during the pre qualification. It can even cause legal headaches if you were counting on this sale in order to purchase your next property. This is a very important safety net in any offer that benefits both Buyer and Seller.
. Inspection Condition:
The inspection is for the buyer’s benefit allowing them to learn more about the house and perhaps any maintenance concerns they would need to address. The inspection is the buyer’s expense, to be conducted within a certain timeframe. If the home inspection uncovers major repairs that neither the buyer or seller are willing to remedy the offer can become null and void.
. Insurance Condition:
this is typically included for the benefit of the buyer to make sure there are no issues with insuring the property. Insurance companies are often aware of prior claims against a property that perhaps even the current Seller is not aware of such as a fire or crime that may have occurred several years ago.
Some other conditions that are of benefit to have in an offer:
- Visits to the Property: You may want to visit the home after the offer has been accepted to plan out your move, taking measurements or to decide on paint colours, furniture, etc. The number of times you can re-visit is included in the agreement with a minimum notice that shall be given to the seller—typically 24 hours, and this visit should only be between 30-60 mins.
- Sale of the buyer’s home: A condition that allows the offer to go through to fulfillment based on a finding a buyer for your home may alleviate a lot stress for the buyer. This is within an agreed-upon period-of-time. (This condition often comes with what we would call an escape clause (read further to learn more)
- Escape Clause: The seller can include a clause to keep their options open, if they were to receive a second offer that you choose to consider, you may give the original conditional offer an opportunity to waive their condition within a 24-48 period making their offer firm. However, if they are unable to waive or fulfill their condition this can allow you to entertain the second offer and proceed with it. Tip: Caution is needed to ensure that you are selling your home to two different buyers and/or that your property would still be advertised ensuring that buyers would still show interest
These are just a few conditions there are many more and depending on the circumstances would need to be considered and perhaps included such as conditions for tenants, repairs, if it is a condo getting a status certificate.
HOWEVER, one condition that we like to see in an offer
This condition shows great respect to all parties included because no one wants to open the door to their new home and find a mess that needs to be addressed before moving in. Asking the sellers to leave the home in a broom swept condition and remove all unwanted items/debris such broken furniture, personal items, paint cans and garbage