You are officially, Conditionally Sold (C/S) … but what does that mean? Conditionally Sold is the status a property will be classified as for a certain agreed upon amount of time. The buyer requests this time to satisfy their conditions. There are a list of possible conditions below and each condition will take some time to satisfy.
For the seller, this is a stressful time because there is likely not too much that they can do to speed up the process and unfortunately a lot of this time is spent ‘waiting’. The buyer will likely schedule a Home Inspection and the bank/lender might schedule an appraisal with you. The best thing for the seller to do is to be as accommodating as possible in regards to these bookings and by the end of the conditional period your realtor will get in touch with you to discuss the next step in the process. You may receive a ‘Waiver of Conditions’ which would make your sale Firm OR you may receive a ‘Notice of Non-Waiver’ which would mean the buyer could not satisfy all of their conditions and that you will be anticipating your next offer.
As the buyer, this Conditional period will be very busy, they will be working diligently to satisfy all of their conditions by the agreed upon date. They will be working closely with their mortgage representative to provide all necessary documents as well as working towards satisfying any other conditions they may have written into the contract.
Financing is probably the most common buyer condition in a purchase contract. This condition means that the purchase contract is subject to the buyer securing financing before the agreed upon date. (The Condition Day)
If you included a financing condition, you need to confirm your financing before waiving this condition. Before you waive your financing condition, your lender (or mortgage broker, if you’re working with one), will need documents related to the property you’re buying. They will likely need:
- a copy of your accepted Offer to Purchase
- the listing sheet for the property you’re purchasing
- copy of the Real Property Report for the property (single family home/bareland condo)
- current title for the property
Make sure you carefully review the mortgage commitment provided by your lender. Lenders sometimes include various conditions in such a commitment. If your lender includes conditions, carefully consider whether you are ready to waive your financing condition on the Offer to Purchase.
If you included a home inspection condition in your Offer to Purchase, it’s time to hire a home inspector. Home inspectors in Alberta need a Home Inspector’s Licence through Service Alberta. A home inspection is a professional opinion on the condition of a property based on a non-invasive examination of its features and components.
The Property Inspection condition allows the buyer to have the home inspected by a property inspector of their choice. The home inspector will be testing everything…. appliances, furnace, water, etc. It is a very thorough process!
The home inspector will give you a written report of their findings. This report will give you a sense of the condition for a number of major components, which typically will include electrical, heating/air conditioning, roof, and foundation. The home inspector will also attempt to determine if the property has any moisture problems, but they base that assessment only on what is visible.
It’s not unusual for a home inspection to uncover issues. Talk about the report with the home inspector and with your real estate professional.
Remember that when you include a home inspection as a condition, that condition only covers a home inspection by a home inspector. If you would like additional inspections to occur, you need to include them as conditions in your Offer to Purchase.
Each condo corporation has documents that identify details about their financial stability and their maintenance plans for the common areas. Having the condition of a professional reviewing these documents and your satisfaction of that review, is a great way to be fully informed and protect yourself.
If you’re buying a condominium, you will likely include a condominium document review condition. Condominium documents relate to the operation of the condominium corporation. When you’re buying a condominium, you’re buying into the corporation, common property, and shared responsibilities. You want to ensure the condominium corporation is financially stable, managed well, and that the property is well maintained. The seller is required to provide you with a number of condominium documents.
There are professionals who will, for a fee, do this review for you, provide you with a summary of the documents, and identify areas about which you might have concern. That review can uncover financial difficulties, unacceptable bylaws (for example, restrictions as to size, number or type of pet), or necessary maintenance. Your reviewer will discuss their findings with you – highlighting anything of concern. While you want to ensure the unit itself is what you’re looking for, and that it will serve your purposes as a home, you also want to make sure you’re comfortable with the way the corporation is run.
Some condo boards have rules about pets. Sometimes, that rule is that the condo board must approve your pet, before they are allowed to live in the complex. This condition, gives the buyer time to apply to have their pet approved by the board.
With certain kinds of properties the offer may be conditional to the buyers satisfaction of the water source and flow rate of the water supply and a review of the well and water reports.
Properties that have a septic system may include a condition for an inspection of the septic system. This may include an inspection of the actual septic tank and possibly a percolation test of the field. (A percolation test will show how quickly the field will dissipate the liquid pumped into it)
Conditions are met
If you meet all of your conditions and you’re prepared to proceed with your purchase, your real estate professional will provide you with a waiver to sign.
If you do not waive all of your conditions, your accepted Offer to Purchase is null and void. The seller has no further obligations to you and you have no further obligations to the seller.
If you waive your conditions, and end up not proceeding with the purchase, you could lose your deposit and may be subject to legal action. Only waive your conditions if and when you’re confident you’re going to proceed with the transaction.