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Conditions in an Offer

Real Estate in Sudbury seems to have picked up the last few weeks, which can only mean one thing… The Spring Market is upon us! With the number of home sales likely to take place over the coming months, I thought this was a good time to go over conditions in an offer.

Conditions are put into offers to help both buyer and seller. Conditions represent actions or tasks that must be completed by the buyer and/or seller in order to complete the transaction, failing which the parties agree to release each other from the agreement and return the deposit to the buyer. They usually have a timeframe for which to be completed. Most commonly, you will only find conditions from a buyer in an offer, but in some situations they can beneficial for a seller as well. We will cover the most common for both, as well as appropriate timeframes for each.

First off, every offer will have at least one condition – that the buyer agrees to pay the balance of the purchase price to the seller, done in the past with a bank draft or certified cheque, but now usually done via electronic funds transfer from the buyer’s lawyer to the seller’s lawyer. This gets done on closing. All-in-all, this is very straight forward.

Other very common conditions are a financing condition, and a home inspection condition. Again, fairly straightforward – the buyer needs to arrange a mortgage to buy the property, and would like a home inspector to go through the home and identify any problems that the buyer may not have found while viewing the home. Some Realtors will also include a condition to arrange insurance on the property. Personally, I do not include the condition, and advise my clients to call their insurance agent to get a quote while arranging financing. I consider it a little redundant, and prefer to keep my offers as clean as possible. Some buyers, however, prefer to see everything in writing, and it is absolutely ok to include it. The typical timeframe to complete these conditions is approximately a week. A buyer with his/her financial affairs in order should be able to arrange financing within 72 hours in most cases, but it is not uncommon for this to take as long as 2 weeks when things get a little more complicated. Another thing to consider is how much activity is taking place in the market. The best home inspectors will be very busy the months of April/May/June, and it may take a week to 10 days before they can grant you an appointment for a home inspection.

I recommend communication between the buyer’s agent and the seller’s agent, just to keep everyone informed about where things stand. I usually set the date to remove conditions as the same date for all of these, so as to avoid having to submit multiple notices for each, but will advise my colleague on the other end as we fulfill each condition to let them know things are progressing.

When dealing with a rural property, one on a well for water and having a septic system, common conditions include the need for a bacterial analysis of the drinking water from the local health authority, as well as the septic being pumped before closing. It is also common for a warranty on the related equipment to be included in the conditions, stating that everything is in working order. Any documentation here is usually provided by the title search date.

Another common condition this time of year is the SPP (Sale of Purchaser’s Property). We won’t get into that here, as it was covered in great detail in our last blog post.

Sometimes, it is necessary for the seller to include a condition. If there is another agreement to purchase in play, the condition of the seller being released from the previous offer will be included. Another common seller condition is for the seller to find suitable accommodations. You will see this when the seller has listed their house for sale, but not necessarily found their next home to purchase. You will typically see this condition with a two week timeframe. If the seller has found the house they would like to purchase, this condition will be changed to say it is conditional on the seller entering an agreement to purchase a specific property. As I stated in my previous blog article, if you are not in a position to carry two homes should your SPP be bumped, it may be better to hold off on putting in that offer, and waiting until you receive an offer on your home and having this condition included in you sale.

In multi-family sales, it is common for a buyer to ask the seller to provide an up-to-date ESA Inspection, and a Letter of Compliance from the fire department, commonly referred to as a Retrofit. We will cover multi-family transactions in a later blog post.

Clauses cover a wide range of situations. Our clause library contains over 300 pre-written clause that cover almost all situations you will encounter in a typical real estate transaction. I recommend not worrying too much about what conditions you want in your offer, but rather express your concerns to your realtor. Let them know what your concerns are, and what you need to get done in order to comfortably buy the home, and let them select the appropriate conditions and explain to you how they will deal with those concerns.

In the end, you Realtor will have the knowledge to help you navigate the, sometimes, choppy waters of buying or selling a home.


Until next time!


Chad Moore - Sales Representative
John E. Smith Realty Sudbury Limited Brokerage
P: 705-674-5261

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