Conditions are making somewhat of a comeback in Ontario real estate. This is because the market has shifted over the last couple of years. Right now, real estate in Ontario is relatively balanced with market conditions shifting and evolving at a local level.
As a buyer, including conditions in your offer can be an effective way of protecting your interests. However, they can make your offer less attractive to sellers in certain circumstances.
In this blog, we’ll touch on the most common conditions found in home-buying offers, why they’re important, and how your real estate agent can help you read the market to make the best offer possible.
The Ebb & Flow of Conditions
There’s no all-encompassing answer for how many (if any) conditions you should include in your offer. Instead, determining the right conditions for you will be informed by your personal goals and what’s happening in the market.
In a buyer’s market, you’ll have greater leverage when placing an offer and in turn, more opportunities to include important conditions without losing out to competing buyers. When there’s limited inventory – aka a seller’s market, you could be competing with other potential buyers who are interested in the same home as you. In these instances, you may want to consider limiting the number of conditions you include in order to make your offer more appealing to the seller. That said, submitting an offer with no conditions at all can pose potential risks.
The intricate nature of this dynamic is just one of the reasons you should work with an experienced, knowledgeable real estate agent when buying a home. As a professional expert, they can help you craft the best possible offer.
Buying a home soon? Have a look at these other blog posts for helpful advice.
- Will I Ever Be Able to Afford a Home?
- How Much Do You Need to Make a Deposit & Down Payment?
- How Long Should You Plan Ahead Before Buying a Home?
What Are the Most Common Conditions?
While there’s a relatively long list of conditions that could be included in a buying offer, only a handful are common.
Home Inspection
A home inspection contingency allows you to have the property professionally inspected within a specified timeframe before the deal closes. This ensures that you’re not blindsided by costly repairs or major issues while making one of the largest (if not the largest) investments of your lifetime.
Even if a home looks immaculate to the naked eye, it could be hiding problems. A thorough home inspection can uncover hidden problems such as structural defects, plumbing problems, mould, pest infestations, or faulty wiring. If the inspection reveals significant issues, you may have the opportunity to negotiate repairs, request a price reduction, or walk away from the deal altogether.
Mortgage/Financing Contingency
Another common condition is known as a home financing or mortgage contingency. This clause makes your buying offer conditional on your ability to get approved for a mortgage on the home. This protects you from making a major financial commitment without having the proper resources.
Speaking generally, it’s a good idea to get pre-approved for a mortgage before you start house hunting. Not only can it give you a better idea of what you’re able to afford, but it also means one less condition to include in your offer – making it all the more appealing to sellers.
Current Home Sale Contingency
One common anxiety among home buyers is the fear that their current home won’t sell in time for them to land their ideal future home. So, some choose to include a selling contingency in their offer, which makes the deal conditional to the sale of their existing property.
In other words, the purchase doesn’t go through unless your home is sold within a specified timeframe. This ensures that you’re not obligated to buy a new home until your current one is sold – protecting you from potential financial strain.
Given the buyer-favouring dynamics of this condition, it’s understandable that it can make sellers hesitant. With that in mind, including a selling contingency may only prove effective in very specific circumstances.
Need more home-buying tips? We’ve got plenty of other blog posts for you to explore.
- Can You Buy a Home Without an Agent?
- How to Know If You’re Ready to Buy Your First Home
- Why You Should Work With a Real Estate Agent Who is Local to Your Area
Buying With Bosley Real Estate
If you’re looking to buy your first home, working with a reputable real estate agent should be top of mind. At Bosley Real Estate, we’ve helped Ontarians discover and buy their perfect homes for almost a century, navigating all kinds of market trends, economic conditions, and major industry changes. As your personal professional guide to the market, we’ll help you reach your goals as soon as possible.
Want to make the most of your home budget? We can help. Give us a call at 416-322-8000 or email info@bosleyrealestate.com to get in touch.
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