Conditions in an Offer to Purchase
Your real estate lawyer can advise you about conditions you may wish to include in your offer. There is a wide range of possible conditions, but the most common ones are arranging financing satisfactory to you and obtaining a home inspection satisfactory to you. The agreement is not firm until these conditions are waived or fulfilled.
The financing condition gives a buyer the right to terminate the deal and get the deposit back if the buyer is unable to obtain financing satisfactory to the buyer. Of course, if you are pre-approved for a mortgage, this clause may not be needed. If you are unable to get the loan you need, the financing condition protects you from losing your deposit and being sued by the seller for non-completion of the transaction.
Home Inspection Condition:
The home inspection condition gives the buyer the right to have the property inspected by a home inspector at the potential buyer’s expense. The home inspector will report to the potential buyer on the home’s condition. The purpose of the home inspection condition is to protect the buyer from deficiencies that might not be readily apparent. The potential purchaser has the right to terminate the deal if not satisfied with the home inspector’s report, or the purchaser may ask for a reduction in the price.
In a hot real estate market, potential buyers may feel their offer will be more attractive to the seller if there are not conditions attached. Obtaining pre-approval for a mortgage is one way of getting around the need for a financing condition. However, buying a house without a professional home inspection condition can be risky. Trying to sue the seller after closing for latent defects is often expensive and ultimately unsuccessful.