The offer to purchase a house, condo, or land can generally be either Conditional or Unconditional.
First, most of the purchase offers that are written are Conditional. Usually they are subject to:
a) the Buyer being approved for New Financing (Mortgage)
b) a satisfactory Property Inspection
c) a satisfactory check and approval of the condominium documents (if purchasing a condo)
When the buyer and seller agree to the conditional purchase offer, then the buyer is given a certain amount of time to "satisfy" the conditions on the offer.
- The financing needs approval from a lender (sometimes an appraisal is ordered by the lender) before the Financing condition can be met.
- A property inspection needs to be completed, discussed if necessary, and approved by the Buyer.
- The condo documents must be given to the prospective buyer to review however they deem necessary to check in to the condominium.
Once the buyer has satisfied each condition, their Realtor can help them remove (satisfy) the condition. Once all the conditions are removed, the property is then considered "SOLD".
If a buyer decides not to satisfy/remove a condition, or if the set condition day and time pass without the condition being removed, then the offer to purchase is voided.
This is to protect the buyer from inadvertently buying a property through an error. There must be wilful completion of the transaction.
Now, there are other conditions that can be attached to a purchase offer. Some examples are:
- Subject to Sale of the Buyers home
- Subject to viewing and approving the property
- Subject to satisfactory testing of a well and septic system
There are almost unlimited conditions that can be written. Heck, Sellers are also able to put conditions on an offer too, if they want.
Unconditional offers are also sometimes seen. When the market was particularly hot in 2006 and 2007, I saw quite a few offer with no conditions. I must say that I personally don't think anyone should put in an unconditional offer unless they know ALL the possible ramifications of doing this. You could be stuck with some pretty big problems.
Finally, the conditions that are put on an offer are to protect either the buyer or seller (or maybe both)depending on the situation. If the two sides agree to a condition then they are making reasoned decisions. If all goes well, then the conditions can be quickly satisfied, the home sold, and both parties can move on with life.
If you have any questions on conditional offers to purchase, or any other real estate matter please give me a call or email. I'm here to work with you.
