Real estate deal conditions are a good thing.
We are strong believers in real estate deal conditions. Now that we are in a more balanced market, and houses are not selling in multiple offer scenarios, as a real estate buyer you have more power to make a thoughtful deal with conditions.
In a competitive market brought on by the pandemic and low inventory of houses for sale, it was common for us to see real estate deals without any conditions and firm offers. A 100% firm offer means that the purchase is final, and the buyer can’t back out of the deal.
Here are the most common conditions that we see in real estate deals:
Home Inspection Condition
This allows the real estate buyer an opportunity to hire a professional home inspector to ensure there are no major issues with the house you are buying. Some issues cannot be seen by the average eye. A professional would be able to tell you if there are issues with the foundation, the roof, the attic, or plumbing… just to name a few.
If a problem or problems are found, they can be dealt with in different ways, dependent upon what you and the seller decide. As the buyer, if you are unsatisfied with the inspector’s report, you have the option to walk away from the deal.
We always recommend a home inspection – it would be best to find out before the purchase if there are any major flaws with the house that need to be dealt with immediately.
This condition allows you to secure a mortgage. After you put an offer in on a house, you must secure financing from a lender. Having this condition in the real estate deal allows you the grace if for any reason your financing does not go through.
Within the financing condition, is usually an appraisal condition. This condition is on behalf of your lender to ensure you are paying fair market value for the house. Ultimately, an appraisal decides if the loan you are applying for is true to the property’s value.
Home Sale Condition
If you aren’t a first-time home buyer, then you likely have a house that needs to sell prior to you buying a new house.
If this is the case, a home sale condition allows you time to sell your current home before you make the real estate deal final.
If you are not able to find a buyer for your current home, in an agreed upon timeframe, then you will be able to step away from the deal without losing any money that you have put down.
Your trusted realtor will tell you what is realistically negotiable depending on the real estate market conditions. A firm offer is typical in a hot market but not as the market is right now in the Fall of 2022.
The offer is a legally binding document – once you sign it, it must be followed or there can be consequences. If you do not understand something, do not sign it, and ask your realtor or your real estate lawyer.
There are no dumb questions, and you must ensure that your best interests are taken care of in one of the biggest financial transactions you will ever make.
To learn more about how we can help you, please contact us.
This article is intended as an informative piece about the subject. It should not be taken as legal advice. We recommend you connect with a real estate lawyer about your specific legal issue.