What are Real Estate Conditions?

Real Estate conditions are a big part of your offer to buy a home, and how you choose to sell.

What are real estate conditions in a real estate offer?

When you make an offer on a house in Ottawa or receive an offer on your house, you are agreeing to follow through on probably one of the largest transactions in your life! The current Ottawa market is moving quickly, and lots of first-time buyers are looking for insight - we’re here to help!

When making a large decision, you want to be sure everything is set to run smoothly. A lot is on the line! This is where conditions come in. Conditions can also be used by buyers to ensure their own safety and comfort during a transaction. A condition is located on the Schedule A or last page of the agreement of purchase and sale with the other clauses that are specific to your situation and purchase.

In simpler terms, it is adding something you would like to do before you agree to buy a home or something you would like to have confirmed before you make a purchase. This is to protect both the seller and the buyer from any issues the buyer may have, like financing, selling their previous home, or issues with an inspection. It also protects the buyer from making confirmation on a sale when they are unsure about a certain aspect of the home or sale. 

Conditions are also typically dependent on their ‘condition date,’ rather than on the closing date. The real estate contract rests upon the condition being completed, and if it isn’t completed by the condition date, then the entire contract expires. The entire contract is ‘conditional’ on these conditions, being done by their condition dates. 

What conditions can I make?

In theory, you can add any conditions you want or need. A condition is just a clause added to your home-buying contract and can be custom to what both the buyer and seller need in order to feel confident in the transaction.

There is a difference between conditions and terms. Terms of an offer will include expectations of what you will receive with your house, such as appliances or a fix to an issue within the house.

A condition, in contrast, is an action that needs to be taken before the time in which the sale becomes binding. 
It’s important to consider these differences with your New Purveyors agent when deciding on the terms and conditions of your purchase or sale.

What are the most common conditions?

• Buyer Financing

  • A confirmation from the buyer that they will be able to get a mortgage. 

• Property Inspection

  • The buyer requests an inspection of the property from a licensed professional property inspector.. 

• Insurance

  • Some properties may have a higher need for insurance, a higher price for insurance, or be high-risk for insurance companies and thus hard to cover. 

• Warranties

  • Considering any warranties that may be currently in place, and reviewing those to see if the contract rolls over

• Sale of Property

  • The offer is conditional on the buyer selling their current home before buying a new one

• Subject to Appraisal

  • A request for a written estimate of the value of a property, as of a specific date.

• Custom Condition 

  • A custom condition is one decided on by the seller or buyer

• Status Certificate

  • Used when purchasing condominium properties

What are the types of conditions?

• Condition Precedent

  • The agreement rests on something happening. If this thing happens, then the condition must take place.

• Condition Subsequent

  • The agreement rests on something not happening. If this thing happens, then the condition is void and does not have to take place.

How are real estate contract conditions of benefit to me?

Conditions keep you, as the seller or the buyer, comfortable during a sale. It ensures that you achieve everything you would like before a contract is officially in place. 

They give both the seller and buyer time to arrange what they need to feel confident in the deal, and the conditions are a resting platform for the real estate contract. Both parties can feel safe knowing that the real estate contract will not be active if the conditions are not met.

How can real estate contract conditions impact my offer? 

During a ‘hot market,’ in particular for sellers, conditions may be a slowing factor for a deal. When there are so many buyers looking for homes, and a lack of inventory in properties, sellers may want to find the most simple and quick sale for their property, given that the offer price is right. 

If you are looking to buy in a seller's market, you may not have much of an opportunity to provide any conditions. If you are a seller in a buyer’s market, the same may be true.

Have questions about conditions, an offer, or real estate in general? Fill out the form below and we would love to help you out.