by Nutan Brown
on Wednesday, January 5th, 2022 at 1:21pm.
When purchasing a home, the buyer has the option of including "conditions" to the offer. This protects the buyer from certain risks associate with making a major purchase. If the conditions are not met, the buyer can back out of the sale without penalty.
Some of the most common conditions that buyers include in their offer are financing, home inspection, and sale of another property.
However, there are situations where the buyer may not include conditions to their offer. In this case, once the offer is signed by both parties the deal is firm and neither the buyer nor the seller can back out. This is what we refer to as an unconditional offer.
An unconditional offer can be beneficial to the buyer under certain circumstances, such as during a bidding war when multiple buyers are making a bid on the same house and they all want to put their best foot forward. If two offers are comparable, but one has conditions and the other does not, then the offer with no conditions is more attractive to the sellers.
While it may be advised to make an unconditional offer under certain market conditions, there are risks involved that you should be aware of. For instance, without a financing condition you may be on the hook if you are not approved for financing or if you can't afford the down payment.
You may also get stuck with a faulty home if you skip the home inspection. During your walkthrough of the home, it may seem to be in good shape, but home inspectors often find issues that go unnoticed.
For these reasons, you should include a conditional offer in most cases. It is important to have an experienced real estate agent by your side to help you make the decision.
If you are thinking of entering the market, feel free to contact me for some advice.