Offer Conditions Sellers Should Expect

From The Blog

12 November 2023

Offer conditions sellers should expect

For most of us, buying a home will likely be the most significant investment of our lives. There are not only financial elements to consider but emotional ones too. You wouldn’t take this kind of purchase lightly so you can’t expect your buyers to either. It’s only fair to give them the chance to complete any due diligence they need to in order to make sure they can complete the transaction. When sellers don’t allow that opportunity, they run the risk that their sale may be delayed or even fall apart completely. Some buyers manage to get their ducks in a row before making an offer. Most often however, these due diligence concerns can be handled through a conditional offer to purchase. Offer conditions sellers should expect

offer conditions sellers should expect

What is a conditional offer and who benefits from one?


In simple terms, a conditional offer is when an offer to purchase/sale contains conditions that must be met before the sale is firm. Conditions can be included in an offer to protect the buyer or seller. These conditions cover a range of issues from securing financing to making sure that a home’s mechanicals are in proper working order. The key is that both buyer and seller must agree to the terms of each condition. A seller does not have to accept a buyer’s conditions but if they’re reasonable and there’s no better offer on the table, it’s a very typical part of the offer process.

More often than not, conditions are put in place by the buyer because it facilitates a safety net for them.  If a buyer is unable to satisfy their conditions in the timeframe outlined in their offer, the offer becomes null and void. This means the buyer is no longer under any legal obligation to move forward with the purchase. If all a buyer needs in order to satisfy those conditions is a bit more time (maybe the bank needs a few more days to complete financing, for example) then a seller could agree to extend the original conditional period in order to keep the agreement alive.


Common conditions

There’s a lot to consider beyond the price point of a home. Offer conditions can help to protect both buyer and seller. They can also result in a smoother transaction as it keeps both parties fully informed. Here are some of the most common conditions encountered during the offer process and how they can affect your sale.


Financing and/or Appraisal

A financing condition tells a seller that the buyer’s offer to purchase hinges on obtaining funding through a lender. The condition affords the buyer time — usually about a week — to confirm that this financing has been approved.

If a buyer needs a mortgage in order to purchase your property (the vast majority do), their lender has the right to request an appraisal of the property. This will be done by an appraiser of the lender’s choice, to compare its true value to the sale price. If the appraisal comes in lower than the agreed upon sale price, the buyer may not get their mortgage. When this happens, re-negotiations may be necessary, or the buyer may walk away from the deal. If this happens, the deposit is returned to the buyer. 


Home inspections

While a seller is not obligated to allow it, most agents will suggest that buyers include a home inspection condition in their offer. This is a way to ensure that buyers understand exactly what they are purchasing and that the property is structurally sound. Unless they’re in possession of competing offers, sellers should accept this condition. When an inspection isn’t allowed, it suggests to a buyer that the seller may have something to hide. Home inspectors are booked and paid for by the buyer so they can feel confident in impartial results. 


Well/Water Testing

This condition is unique to rural properties that get their water from a well. Many buyers, especially those new to country property, are unfamiliar with the ins and outs of getting water for household use from a well. One way for them to feel more comfortable is to include a condition in their offer to purchase that verifies the capacity of the well and confirms that clean drinking water is available. Water capacity can be verified through the running of a “Flow Rate” which will be completed by a certified Well Technician. This normally involves running the water for a set period of time and recording how much water the well provides within that time and how quickly the water level inside the well recovers.

A Water Potability Test can be run by the buyer’s or seller’s agent. It involves submitting a small sample of tap water to the local health unit for bacteriological testing. Results will outline the presence or lack of any contamination in the well that could potentially pose a threat to health. If a problem does exist, the condition can be worded so that the seller must remedy the problem before the buyer agree to a firm sale.


Escape clause

As the name suggests, an escape clause is not a condition, but a clause usually added by the seller. This clause gives the seller a way out of a conditional offer if the buyer is having difficulty meeting their conditions and the seller is presented with an offer from another buyer. It is most often used when a buyer must sell their current home before they can buy the next home. If the seller receives an offer they’d like to accept before the original buyer has sold his property, the escape clause allows the seller to demand that the original buyer firm up their offer and complete the sale – usually within 48 hours. If they can’t, the seller has the right to work with the new offer.



Talk to your REALTOR®

When drafting an offer to purchase, most buyers will consider including a few conditions to protect their own best interests. During negotiations, you may also ask that a condition or two be added for your own protection. Both parties should discuss options with their Realtor® to make sure they fully understand and feel comfortable with all arrangements. In complicated situations, it also doesn’t hurt to obtain legal advice from a lawyer.

The conditions included in an offer will vary depending on the situation. With the help of a REALTOR®, you can make sure you’re dealing with the ones that make the most sense for your situation. 


If you’re looking to buy or sell property in Grey Highlands and the surrounding area, Forest Hill – GREY COUNTY would love to help!

Contact us today to find out what we can do for you.


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