Good news! The offer has been accepted! Excellent, but don’t pop the champagne just yet. There are still a few minor details that need to be worked out before you can call that dream home yours. I would be referring to the “conditions” of course. Those pesky conditions have been known to break more than one deal that seemed a sure thing.

If you are new to the real estate game, you might be wondering what I am talking about. A conditional offer on a house is an offer that is pending upon certain stipulations being met to satisfy the requirements of the sale. Sometimes, an offer will come in firm, meaning that there are no conditions and the buyer is offering to purchase the home flat-out. More often than not though, a buyer needs to sort out a few details before the keys are handed over.

 

CONDITIONS FOR SALE

Financing –

The condition that comes up most frequently when an offer to purchase is made is on condition of financing. That means that the purchaser is willing to buy the home, but they must first ensure that they have the funds to purchase it with. Quite often, people will approach a bank or mortgage broker before beginning to house hunt to see if they qualify for a mortgage loan. This lets people know how much money they have to potentially invest in a new home. Of course, if you haven’t bothered to take that step, you just might find that even though you have the desire to purchase a home, nobody will offer you the money sufficient to make that happen. Plus, regardless of  that pre-approval, once an offer has been put on the table, the potential purchaser must go back to their lender and firm up the details. Once the lender’s paperwork has been completed and the mortgage arranged, this condition for sale has been met. If it doesn’t, then you just might find that your conditions cannot be met and the house sale falls apart before your eyes.

Home Inspection –

Having the money on hand is a good thing, but there are other issues that often need to be addressed before a sale gets finalized. As a potential buyer, you have visually inspected the home, but sometimes there is more than meets the eye to a sale. For example, did you crawl up on the roof to see what shape it is in? How savvy are you about knowing the condition of a furnace, foundation walls or other structural aspects of the home? Do you want to trust your unpractised eye or gut feeling on whether or not there could insect infestations lurking just out of sight? For most people, the answer is no, so a home inspector is hired to give the house a once over to assess it for any potential problems. If nothing obvious gets unearthed, or the problems are within reason, then the condition for a home inspection is met. If major issues are discovered and costs cannot be resolved (ie. whether the present home owner fixes the problems or the price of the house is reduced to reflect the cost of repairs), then the house sale is again in danger.

Sale of Existing Home –

With financing organized and the home inspection passed with flying colours, you might think everything is smooth sailing  from here on out. If there are no other conditions and you are a first-time home buyer, that might be the case. What about if you already own a home though? Then the issue becomes one of selling your existing home in order to not be the proud home owner of two houses. Just because you have the desire to move and find a new house that is just perfect, doesn’t always mean that someone else will snap up the house that you want to move on from. Some houses hit the market during a slow spell and languish. Other houses are over-priced and find that people are not interested in stretching to meet the cost. And of course there are other homes that are just chock full of issues that any home inspector worth his salt will warn everyone off of. If you fall into any of those categories, you might be in for a challenge for meeting this condition and moving into your new home. The answer might be to sell your existing house first, then start house hunting for a new one, to avoid this condition altogether. Bridge-financing through your lender can also be arranged, if the carryover period isn’t too long. If you just can’t sell that house though, you might be faced with the loss of sale on your new dream home.

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