Conditional Offers Contract Signing

Across most industries, commercial transactions are quite straightforward and easy to understand. If you went to the supermarket and bought a bag of apples for $3 per pound, then that’s what you’d expect to pay by the time you got to the till. In the real estate industry, transactions can be a little more complex.

Imagine if you discovered that bag of apples didn’t actually cost $3 per pound by the time you got to the till, it was just a starting point to enter negotiations for them. Imagine if you had to have a capable agent working on your behalf to help you win the bag of apples, and there were certain tasks they needed to help you complete before you could actually purchase the apples.

While that might sound like an insane way for a grocery store to operate, it’s what essentially all real estate transactions today require. In an ideal world, real estate transactions would be much simpler. Houses up for sale on the market would sell for their list price, like any other product.

However, the world of real estate isn’t that simple, and transactions are filled with key pieces of fine print you need to comprehend and consider. These are also known as the conditions in your contract to buy or sell a home, and there are four key things you really should know about them.

What They Are

By definition, a conditional offer is an agreement between the buying and selling parties participating in a real estate transaction detailing that an official offer for a home will be completed should a specific action or condition be met first.

In essence, this means that a home will be sold to a buyer only once they complete an agreed-upon piece of due diligence (and, within a specified time window) as outlined in the Agreement of Purchase and Sale contract.

Whether you’re the buyer or a seller of a property, a real estate transaction can only be completed when both parties participating in the deal follow these predetermined stipulations, which are known as “conditions”.

For example, when the status of a real estate listing reads “Sold Conditionally,” this implies that the selling party has accepted a bid from a buyer and is now waiting on a certain agreed-upon condition to be completed before the sale is finalized.

While the buyer’s offer has been accepted by the seller — and oftentimes cash deposits have been made by the buyers — the transaction still isn’t fully finalized and the home hasn’t technically sold yet. These contractual conditions can commonly include a number of different stipulations.


Interested in buying a home but not sure about what the best type of offer to submit is? Learn how to submit a compelling first bid for a property while covering your bases and staying safe from potential risks.


Conditions: What To Expect

There are a number of reasons why a buyer may want to submit a conditional offer for a home. Depending on their personal circumstances or the current state of the real estate market, a buyer may fully intend on purchasing a property. However, a buyer may also not be able to guarantee their ability or interest in completing the purchase without making their offer contingent on certain factors.

For example, a buyer may submit a conditional offer that requires a home to achieve a certain grade on a professional inspection before the transaction is fully completed. In this case, the buyer’s conditional offer could protect them from investing in a home with major deficiencies that weren’t previously brought to light.

Or, a condition may be based on the buyer’s ability to facilitate financing for their purchase. If a buyer is still waiting to get full approval for a mortgage loan from a bank or private lender, they cannot guarantee to the seller that they can pay for their home yet.

Another common condition within an offer could be based on whether or not a buyer can have a building or renovation permit approved by a local government zoning authority. If a buyer only wants to purchase a home in order to build on the existing structure or land, they may want to guarantee they’ll have approval from the governing third parties before their purchase is made final.

While these are perhaps the most common conditions found within conditional offers, there are no limits to what conditions can be included in a conditional offer. However, it’s important to note that while a buyer’s conditional offer may have been accepted, a seller can simultaneously still listen to, negotiate with, and accept offers from other buyers too.


Home inspections are a very common component of a real estate transaction and are generally in place to protect buyers from making any poor long-term investment decisions. Learn more about what goes into a home inspection and why they’re important by reading our related posts here:


The Escape Clause

The Escape Clause is a vitally important detail of conditional offers to know about. The Escape Clause is a ruling in conditional offers that allows the seller to continue to advertise their property for sale and negotiate with other interested parties.

Real estate transactions are won and lost at the negotiating table every day. Learn how an experienced professional can make the difference and help you achieve your personal real estate goals by reading our 5 Reasons Your Agent Should Be A Pro At The Negotiating Table here.

Should a seller accept a second offer from a buyer for their home, the Escape Clause requires the seller to notify the original buyer and award them the right of first refusal on their original offer. The Escape Clause makes it so that the original buyers have a period of time (generally between one and three days) to decide to either walk away from the deal or waive the conditions in their original offer.

Although buyers can choose to waive the conditions in their original offer in order to further convince the seller to stick with their bid, the final decision on which bid will win the property is still in the hands of the sellers.


Thinking about selling your home in today’s hot seller’s market? Here are a few useful reads to help you navigate the competitive market successfully and sell your home for its highest value.


The Final Sale

As previously noted, in order for a conditional offer to be accepted and made final, all of the predetermined contractual conditions within the offer must be completed before a specified date.

Should the home inspection, financing, building permit, or any other condition included in the offer be successfully completed within the specific time frame, it’s the buyer’s obligation to inform the selling party. At this stage, a document called the Notice Of Fulfillment (NOF) outlining the completion of these conditions within the agreed-upon time frame is sent from the buyer to the seller.

This signifies to the seller that the buyer has held up their end of the deal and the contract has been fulfilled. Only now can the transaction be finalized and the sale become final.

One Bonus Tip

No matter how simple or straightforward a condition within an offer may seem, it’s always worth it to get a professional Realtor’s® insight and opinion on a conditional offer before sending or accepting it. An experienced Realtor® will help contextualize the condition, help you understand all of its related implications, and advise you on how it will align with your personal real estate goals.

For more information on conditional offers or about any other aspect of real estate transactions, we’re always willing to offer you our knowledge and expertise. No matter what your question or concern is, you can be sure that we’ll always protect your best interests by keeping you informed. Simply contact us here to ask us anything.

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