OFFER CONDITIONS

Conditions are requirements within the Agreement of Purchase and Sale that must be met for the sale to go through. Don’t let conditions in an offer to purchase intimidate you — once you understand what’s required, you can go into the buying process armed with knowledge and confidence.

A conditional offer depends on whether the respective conditions will be met. These are intended to ensure that the buyer is protected from unforeseen upsets that would complicate or prevent the sale. When any of the conditions are not satisfied, the buyer or seller (depending on who applied the condition), can back out of the agreement without any penalty. You are able to waive the conditions when they have been fulfilled to you and your lawyers satisfaction.

Some commonly included conditions:

Inspection Clause

The sale of a property is often conditional on it passing a home inspection. After the inspection has been completed and is ruled satisfactory, the buyer can then proceed with the sale of the property. If the inspector finds any major faults or flaws, the buyer is allowed to withdraw their offer.

Appraisal Clause

During the mortgage process a home appraisal can be performed on the property being purchased. The reason being that lenders will not loan more money than the property is worth. This protects not only the lender, but the buyer as well.

Financing

Getting approved for suitable financing is one of the most important conditions in an offer to purchase that must be met. Beyond the down payment, there are several fees affiliated with closing that will also need to be paid in hard cash. Make sure you’ve budgeted for these as well.

Status Certificate (Condo)

A Status Certificate provides the buyer with a full overview of the current status of the condo corporation. It will include documents that range from financial statements and budgets to audits and bylaws pertaining to the building. The Status Certificate is there to provide assurance that there are no lawsuits involved with the condo corporation.