When you make an offer to buy a home, you’ll face standard conditions that most contracts include. These conditions protect you and give you time to confirm key details before you are fully committed. They are part of the offer and have specific time frames. If a condition isn’t resolved by its deadline, you usually have the right to walk away without losing your deposit.
Financing Condition
This is one of the most common conditions. It says your purchase depends on getting mortgage financing. Your lender has to approve your loan before this condition can be lifted. If they refuse the loan, you can cancel the sale. This protects you from being locked into a deal you can’t pay for.
Many buyers assume a pre-approval means financing is locked in, but it isn’t until the lender signs off on the deal and property. Waiving this condition without full approval can put your deposit at risk.
Home Inspection Condition
A home inspection condition gives you time to hire a qualified inspector and review their report. The inspector will look at the structure, roof, electrical, plumbing, and major systems. If the inspection reveals serious problems, you can ask for repairs, negotiate the price, or back out.
Skipping or waiving this condition can leave you responsible for costly issues you didn’t know about. Minor defects can be expected, but hidden structural or safety problems can cost thousands.
Sale of Your Current Home
If you need to sell your existing home first, you can make your offer conditional on that sale. This condition gives you time to sell and use that money toward your purchase. However, sellers may not like tying up their property while your sale completes, especially in a fast market.
In competitive markets, this type of condition can make your offer less appealing. Some buyers sell first and arrange short-term housing to avoid this condition.
Status Certificate or Document Review
For condo and townhouse purchases, you will want to review the building’s status certificate and other documents. These show the corporation’s finances, fees, special assessments, bylaws, and legal issues. If the documentation reveals problems, this condition lets you back out or negotiate.
This review takes longer than a home inspection, so the time frame on this condition is usually set to allow delivery and lawyer review.
Appraisal Condition
Some buyers include an appraisal condition to confirm the property’s value matches the offer price. If the appraisal comes in lower, you can negotiate or walk away. Lenders sometimes require an appraisal as part of financing.
Other Conditions
You can also include other conditions on your offer. These might be a title search by your lawyer, insurance approval, well water testing on rural properties, or specific repairs done before closing. Each condition has its own deadline and impact on your closing timeline.
Too many conditions can make your offer less attractive in a tight market. Sellers may prefer an offer with fewer conditions or none at all. That can put pressure on you to waive some conditions to compete.
Common Risks with Conditions
Conditions slow down the sale and create uncertainty for the seller. In a strong seller’s market, you might lose out to offers with fewer or no conditions. Some buyers get pre-inspections or firm financing before they make an offer so they can drop certain conditions.
If a condition is not met and you don’t waive it by the deadline, the agreement usually ends and your deposit is returned. But waiving conditions too early can leave you vulnerable to financial or structural surprises.
