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What is a conditional offer in the process of buying a property, and what are the conditions typically included in the offer?

Picture of Chris Battis By   ·  1 minute read

As a lawyer, I can provide legal advice on the concept of conditional offers in the process of buying a property.

Conditional offers refer to the purchase offers that are contingent on specific conditions to be satisfied before the sale is completed. These conditions can be related to obtaining financing, conducting a satisfactory home inspection or appraisal, or resolving outstanding liens or disputes. These conditions must be clearly stated in the offer and agreed upon by both the buyer and seller.

Typically, the following conditions are included in a conditional offer:

  1. Financing condition: This condition stipulates that the sale is contingent on the buyer securing financing for the property. The buyer must demonstrate that he or she has the financial means to close the transaction.

  2. Inspection condition: This condition ensures that the sale is contingent on the satisfactory completion of a property inspection. The inspection should identify any defects or malfunctioning systems and allow the buyer to renegotiate the purchase price or ask the seller to fix any issues.

  3. Appraisal condition: This condition requires the property to be appraised at a certain value to satisfy the buyer's lender. The property value should be at or above the purchase price stated in the offer.

  4. Title condition: This condition requires the seller to resolve any issues with the property's title, such as outstanding liens or disputes.

It is essential to carefully review and negotiate these conditions with the seller before signing a conditional offer. If the conditions are not satisfied within the specified timeframe, the sale may be terminated, and the deposit returned to the buyer. It is important to note that the deposit may be forfeited if the buyer breaches the contract.

In summary, a conditional offer is a standard procedure in the process of buying a property. If you are considering making a conditional offer, it is advisable to seek the advice of a licensed attorney to ensure that you understand the conditions and implications of the offer.