The process of buying a house is highly nuanced. Encompassing multiple stages, a successful home purchase is contingent on a range of variables, each holding the power to complicate or derail the transaction.

While rare, home purchases can fall short of completion after an offer is accepted. When these terminations occur, home buyers may face financial or legal consequences depending on the specific circumstances.

For buyers, particularly those who have not yet purchased real estate, understanding the process of crafting and placing an offer is essential.

In this article, we will address key insights related to conditional home sales, how often they fall through, and how to avoid complications or risks related to your offer.

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How Do Conditional Offers Work?

Home purchases do not occur on a first-come, first-served basis. Rather, prospective buyers must approach a seller with a formal offer document, known as an Offer to Purchase or Agreement of Purchase and Sale.

An Offer to Purchase will outline a number of essential details, including the buyer’s proposed purchase price, deposit amount, and possession date. In addition to these core elements, buyers may also include optional contingencies (known as conditions) to protect their interests and preferences. Each individual condition will have a specific timeline for completion if the offer is accepted.

When a buyer’s offer includes one or more conditions, it is known as a conditional offer. In competitive markets, it is typically advisable for buyers to limit or exclude contingencies to enhance the appeal of their offer.

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How Long Does a Conditional Offer Last?

To ensure an efficient and professional transaction, buying offers, both conditional and unconditional, typically include a deadline. This prompts sellers to be fair and responsive in negotiating a potential deal.

Currently, there is no standard or legally mandated timeline for expiration. However, most buying offers are valid for one to three days, depending on the circumstances. Some buyers elect to employ an aggressive approach, making the offer valid for only a few hours to encourage a fast acceptance from the seller.

What Happens After an Offer is Accepted

When a seller accepts a buyer’s Offer to Purchase, the transaction is not automatically complete. Rather, both parties must now fulfil the designated responsibilities associated with the offer’s included conditions. During this process, the property becomes conditionally sold (or sold conditional).

Can an Offer Be Placed on a Conditionally Sold Home?

Once a buyer’s offer has been accepted, it becomes legally binding. While competing buyers can still submit offers on a conditionally sold home, the seller cannot accept a new offer unless the transaction falls through.

How Often Do Conditional Sales Fall Through?

While rare, real estate transactions can face complications during the sold conditional phase, and in the case of significant adversities, the transaction may fall through. However, it is important to remember that these circumstances are not just uncommon but also preventable.

Both buyers and sellers can protect themselves from condition-related risks by partnering with an experienced, knowledgeable Realtor who has a comprehensive track record of seamless transactions.

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What Conditions Should I Put on a House Offer?

Buyers do not need to include conditions when placing an offer. However, they may elect to do so based on their market objectives and the advice of their real estate agent.

In Toronto’s real estate arena, common conditions include a professional home inspection, buyer financing, the sale of the buyer’s home, a condo status certificate review and more.

Generally speaking, buyers should express restraint and limit inclusions to only the most relevant or necessary contingencies. Regardless of market circumstances, a cleaner offer can improve a buyer’s attractiveness and increase the likelihood of a seamless purchase.

Buy With Armin Group

At Armin Group, we provide buyers with unparalleled guidance and results – paired with a calm, low-stress purchasing process. Despite the constant evolution of Toronto’s complex real estate landscape, our adaptive expertise offers buyers a refined, financially strategic home purchase.

As experts in personalized property sourcing, we have unparalleled insight into the city’s most exclusive neighbourhoods and the Toronto market. Further, our value-optimizing buying strategies assist buyers in achieving the best possible price and conditions through a self-assured, data-backed approach to offers and negotiation.

Seeking a seamless and strategic home purchase? Armin Group can help. Send us an email at ar********@************ty.ca or call our team at 416.960.9995 to begin your journey.