If you have been browsing online real estate listings lately, you may have noticed a recurring trend. More and more often, you will see the words “Sold Conditional” beside the description. What does conditionally sold mean, and how will it affect you when buying or selling a home? In this post, we’ll explore the implications in more detail.
Selling your home? An accurate, unbiased assessment is the foundation of your effective strategy. Start by booking your complimentary home evaluation with our experts.
Sold Conditional Meaning
At first glance, the meaning is quite simple. A seller has accepted an offer that has conditions attached to it. The buyer may want to verify that they can first secure financing or even sell their existing home before the transaction firms up.
Home inspections are another common condition that buyers may include in the agreement. If all of these conditions are met, the transaction will go through, and ownership of the property will change hands. What happens if they don’t?
Let’s imagine that the buyer included a condition of home inspection, and the report revealed an issue that is cause for concern. The seller can rectify the issue by arranging for repairs or upgrades. Otherwise, the buyer may be able to back out, and their deposit will be returned to them.
Are you looking for even more tips to get results when selling your home in today’s market? Look no further than the related reading below:
- How to Stand Out in a Changing Real Estate Market
- Worth It or Not? What Renovations Really Help When Selling Your Home
- How to Prepare Your Home for a First-Time Buyer
What Does Firm Offer Mean?
A firm offer is just that – an offer with no conditions. Once signed, the Agreement of Purchase and Sale becomes legally binding for both parties.
This type of arrangement is greatly preferred by most sellers as it eliminates the uncertainty associated with the sale. They don’t have to wait to see if the transaction can proceed and can move forward with their own plans.
Buyers, on the other hand, tend to benefit more from conditional offers. It means they can stake their claim on a home that seems to fit all their boxes while having extra time to perform due diligence.
Firm offers tend to happen more often during busy markets that favour sellers. If there is a lot of competition, most homeowners are unlikely to entertain an offer with conditions. Conditional offers are more common during periods of slow activity, when buyers are few and far between.
Can You Put an Offer on a House That Is Conditionally Sold in Ontario?
What happens if you are the buyer and you see a listing that is “sold conditionally”? You can still place an offer. However, the seller is bound to the first buyer, presuming all conditions are met. If the deal falls through, the seller is then free to consider other offers, which gives you a chance.
We recommend that you proceed with caution and guidance. You don’t want to place an offer on one home while you have a tentative offer on another unless it is very clear in writing which one takes preference. An experienced real estate agent can help you craft an offer that protects your interests while giving you the highest chance of success.
Searching for houses for sale in Hamilton or Burlington? Start here by browsing a few of our featured listings.
How Often Do Conditional Sales Fall Through?
While the Canadian Real Estate Association does not publish an exact figure, the number of sales that fall through is quite small. The buyer and seller will both have a conditional period in which to meet all contingencies as outlined in the Agreement of Purchase and Sale. It is in the interest of both parties for the transaction to proceed as planned.
In the event that the transaction does not proceed, the buyer may receive their deposit back if the cancellation is due to a legitimate condition as per the contract. If not, the seller could potentially keep the deposit and explore other legal options.
Is a new home part of your future plans? Check out the valuable resources below:
- Our Ultimate Handbook for First-Time Buyers
- Buying a House in Ontario Is a Team Effort
- Hidden Costs of Buying a Home You Need to Know Now
What Does SC Escape Clause Mean?
Conditional offers can be stressful and inconvenient for the seller unless they can find a way to keep their options open. Enter the “Sold Conditional Escape Clause.” This clause helps to protect the seller from being locked into a particular transaction, especially if the buyer has placed a condition on the sale of their own property.
The seller is still bound to the original buyer. However, the listing agent can notify the buyer’s agent that they are triggering the escape clause. They can either drop their conditions and agree to proceed with the transaction, or they can void the contract, and the seller is free to accept the other offer.
Without an escape clause, the seller can still accept backup offers. However, the new buyer will have to wait for the first offer to become null and void.
As you can see, there is more to placing or accepting an offer than meets the eye. This is especially true in a challenging market. Whatever side of the transaction you are on, an experienced real estate team can help you make the most of the situation.
Do you have more questions about buying or selling a house? Our top agents in Hamilton & Burlington can help you get the results you need. Reach out today with any questions you have, or call 905-332-9223 to connect with our office.
