When presenting an offer on a home, you get to choose the conditions you want to include on your offer. If you’re not sure what to include, here’s a primer of the most common conditions buyers use.
1. Clean and Tidy
This is easily the most common condition. No one wants to buy a home, get the keys, and find a garbage dump through the front door. Buying agents will include a clause that says the sellers leave the home in “broom-swept condition,” agreeing to remove general debris like paint cans, garbage, lumber, and furniture.
2. Re-visit the home prior to closing
You may want to visit the home after the offer has been accepted but before closing, to decide on paint colours, furniture, etc. The number of times you can re-visit is included in the agreement—normally two times—with a minimum notice that shall be given to the seller—typically 24 hours, and maximum visit duration of 1 to 2 hours.
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3. Home inspection
Although it is possible to have a home inspection done before you submit an offer, home inspections are typically included as a condition. The inspection is the buyer’s expense, to be conducted within a certain timeframe—usually about a week. If the home inspection comes back negative, the offer can become null and void.
4. New mortgage
You’ll need to secure a sufficient mortgage. Even if you’ve received a pre-approval, you may not get a full approval for the particular property at the price you offered to pay for it.
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If the property has a rental unit, there will be a condition on whether to assume the tenants or to evict them. If evicting, sufficient notice has to be given to the tenants, which will likely be spelled out in the offer.
There could be some damages in the home that you’d like fixed before you move in. You can include a condition for the seller to fix them, by a certain date on or before closing. If you choose the latter, you can include an amount that would cover the cost of the repairs, in the case that the seller doesn’t fulfil this condition. The seller only receives this amount once the repairs are complete, and you as the buyer retain this amount—a holdback from the purchase price—if the repairs aren’t finished by closing.
7. Escape Clause
The seller can include a clause to keep their options open, if they’ve received a conditional offer but believe they may receive a higher offer at some point. If they do, you as the buyer have a set period—24 hours, for example—to fulfil all buyer conditions within that time. If you do fulfil them, your offer is still accepted and the seller can’t accept the other offer. If you don’t fulfil all your conditions in that time—the seller can nullify the first offer and go with the second.
Tip: Sellers have to be careful about having two offers on the table at the same time. There have been cases where both were technically accepted and complications led to in-court disputes. Escape clauses are very rare, so if you’re selling your home and want to include this clause, be sure the circumstances justify it.
8. Sale of the buyer’s home
If you’re concerned that you won’t sell your current house, you may want to include a condition that only allows the offer to go through if you also find a buyer for your current home. This is within an agreed-upon period of time.
This condition is commonly paired with an escape clause that states that if the sellers receive a second offer, you have a short period of time to drop your stipulation and fulfil your conditions or they can nullify the agreement and move on.
9. Status Certificates [Condos Only]
A status certificate is a document that contains essential information about the unit and the financial situation of the condo corporation. This includes condo fees—including known anticipated increases—special assessment, legal disputes the building corporation is in, and size of the reserve fund.
This is extremely important, as you want to know that the condo corporation is doing well financially and that there won’t be any surprises once you’ve moved in.
The status certificate can take weeks to arrive, so this condition normally has a longer period of time attached to it.