What Are Home-Buying Conditions
When it comes to making an offer on a home, there’s no shortage of logistics to iron out. The truth is, there’s a lot more to it than the purchase price you’re willing to pay. One of the most important considerations is which home-buying conditions you want to include. Understanding these items—and how adding them to your agreement can protect you—is one of the keys to ensuring a smooth purchase that’s free of regrets.
In this post, we’ll tell you everything you need to know about home-buying conditions…
Home-buying conditions explained
While some home hunters have heard of conditions, many are unsure about how they work. Put simply, these are stipulations that must be met before a real estate purchase is finalized. They state that if a certain event doesn’t occur, the buyer can back out of the deal without consequences.
When conditions are carefully selected and added to an agreement, they can provide an extra layer of protection. Knowing you can walk away from a deal with your deposit if a worst-case scenario occurs can reduce the risk associated with your purchase—and lead to greater peace of mind.
A few common conditions
While there are many potential conditions, some are used more often than others. One of the most common is a financing condition, which states that your purchase is contingent upon your ability to secure a mortgage. Remember: pre-approval isn’t always a guarantee!
You can also make your deal conditional on a successful inspection. Before you buy a house, you’ll want to gauge how much money you’ll need to repair and maintain it. If you learn (for example) that the roof and HVAC system need to be replaced soon, you can make a more informed decision about whether to buy. If it’s a no-go, your inspection condition will protect you.
When it comes to condos, inspections are often unnecessary. If you’re like most buyers, you’ll opt instead to make your purchase contingent on a status certificate review by your lawyer. This crucial document paints a comprehensive financial picture of the building in question—and its management. We highly recommend status certificate review conditions!
These are just a few of the conditions to consider when you’re buying a home. You can add stipulations that cover all kinds of things—from ensuring that all appliances and systems are in good working order, to confirming that your new home will be empty and swept when you move in!
Do you need them?
Given how useful conditions can be, you may be wondering why any buyer would consider forgoing them. Usually, when it happens, it’s in a multiple-offer scenario.
When there are other potential buyers vying for the home you want, it can be tempting to do anything and everything to compete. That may include making an offer that’s free of conditions, since removing them can simplify the process for sellers. That can be a risky move, which is why we often advise against it.
Of course, this step can be taken safely under certain circumstances. It’s all about due diligence. If you work with an agent who has reasonably good knowledge of home construction, they can often spot some of the more obvious red flags. When a pair of expert eyes is necessary, they may be able to bring in their own inspectors to help—and do so in a way that’s not disruptive or time-consuming for the seller.
You should also be aware that if an agent has been in the business for a while, they may know the other professionals involved. When they’re reputable and trustworthy, streamlining the process can be beneficial to both sides.
When you’re ready to make an offer, make sure all your bases are covered. An experienced and knowledgeable agent can help you understand which conditions to include—and reduce the risks associated with buying overall!
Gearing up to buy a home? Get in touch to learn more about the process—and start exploring your options!
