You may be wondering if conditional offers are possible in today’s market. Given the shift to a more balanced market, you are less likely to see multiple offers depending on the type of property, location and marketing strategy used by the seller. The majority of seller’s in today’s market are pricing their homes closer to their expectations. What does this mean for you? An offer with conditions is now becoming the norm again. This means that you can submit an offer with conditions such as: financing, home inspection, review of status certificate and even possibly, the sale of your home.

Let’s discuss some of the conditions below:

Condition on Finance

In the heated market between January of April of this year, most homes saw bidding wars where multiple prospective buyers were offering on homes with no conditions. The final selling price was anyone’s guess. The winning bidder now had to take that accepted offer and provide it to the bank to hopefully fully approve the mortgage at the sale price. What happens if the lender did not fully appraise that property? The buyer would now have to come up with the difference between the sale price and appraised price.

In today’s current market, you now have the opportunity to include a condition on finance on your offer. Should the seller accept it, you now have a specific time period for the lender to fully approve your mortgage without the stress. A typical offer will include a condition on finance between 3-7 days depending on the situation.

Are you planning to buy a home in Etobicoke soon? Here are some more resources to help:

Condition on Home Inspection

Another important condition that a lot of buyers weren’t including in the hot market was the home inspection condition. Often in the Toronto market, sellers would provide a pre-list home inspection where buyers could rely on the option to review the inspection completed in advance of an offer day. Potential buyers would then have to consider whether or not the 3rd party information was sufficient enough for them to proceed with or without the home inspection condition on an offer. This was often a quick decision that had to be made within a day or two without discussing in detail the home inspector’s findings.

Today, you can comfortably include the home inspection condition. This provides you the opportunity to schedule a time for you and your home inspector to inspect the home in person and have a thorough discussion about the pros and cons of the inspector’s report and ask all the relevant questions for you to make an informed decision.

Conditional on the sale of your current home

Gone are the days when you would have to purchase a home first before selling the one you already owned. At the time, inventory was low, demand was really high and multiple bids meant that securing a new home would be difficult. The opposite holds true today. Now, we have been seeing properties sell conditionally on the sale of the new buyer’s home. This provides buyers with a less stressful scenario of trying to sell their home within a certain time period after already purchasing another home without any conditions. Keep in mind that not all sellers will agree to this condition.

We hope this was informative and answered any questions about conditions that you may have had. If there is anything else you would like to know about the Real Estate market please contact us here.