How Long Does A Conditional Offer Last?

Buying a house is a nuanced process with a lot of moving parts. It can feel like a long journey from the time you begin your search until the day you get your keys. While it’s always helpful to keep the big picture in mind, sometimes it helps to zero in on the finer details, such as: How long does a conditional offer last?

We could run an entire course on just the offer process alone. Today, we’ll break it down even more and address what you need to know about conditional offers.

Do you have a specific home buying challenge? The best way to overcome it is with personalized guidance. Booking your complimentary Buyer’s Consultation is an excellent first step.

What Is a Conditional Offer?

To start with, what does a conditional offer mean? Just like it sounds, it’s an offer to purchase a home that is only finalized if and when an agreed-upon set of conditions is met.

It’s the opposite of a firm offer where a buyer agrees to buy a house with no strings attached. No home inspection, no waiting to see if the buyer’s existing house sells, and not contingent on financing. If the seller is amenable to the price and closing date, the deal is all but done.

Typically, a seller much prefers a firm (or unconditional) offer because it removes uncertainty from the equation. They don’t have to put their plans on hold to see if everything checks out.
Buyers prefer conditional offers to protect them and provide more control over the outcome.

Do you have more questions about the home buying process? The posts below will arm you with information:

How Long Is the Conditional Period?

How long a conditional offer remains on the table depends on the contingencies and the type of market at the time of the transaction. The conditional period is negotiable, but the final terms will be clearly outlined in the Agreement of Purchase and Sale (APS).

If it’s a fast-moving market with a lot of demand and competition, the conditional period will generally be quick. That is, if a buyer submits a conditional offer to begin with. Particularly hectic markets often require an unconditional offer to have a chance of success.

Buyer’s markets put more control into the buyer’s hands. Often, they can stipulate that they need more time to ensure all conditions are met to their satisfaction. Home inspection and financing conditions can take up to a week to finalize. The condition of sale of the buyer’s existing house typically requires a longer duration. 30 days is standard, but unusually slow markets could support up to 60 days to give the buyer a chance to list and sell their own home.

What Happens After the Condition Period?

After the conditional period is over, two scenarios are possible.

One: The offer will firm up.

The buyer’s agent will notify the listing agent in writing that all conditions have been waived or fulfilled. At this point, the APS becomes legal and binding. The buyer will submit their agreed-upon deposit to the listing brokerage, usually within 24 hours.

Two: The offer becomes null and void.

If any conditions are not met, the buyer will notify the seller’s agent and the agreement will be terminated. Note: It’s a good idea to include a condition in the APS that the offer expires after the conditional period. That way, you’re not on the hook if you didn’t respond in time. If the offer falls through because of a legitimate condition, the listing brokerage returns the buyer’s deposit without penalty.

What Does Sold Conditional Mean?

“Sold Conditional” is what happens after the seller accepts a conditional offer and before the agreement firms up. This is a period of limbo for the existing homeowner, who must now wait to find out if the transaction will proceed. Often, their listing agent will ensure they have an “escape clause” in the agreement.

This allows them to keep showing their home to other buyers during the conditional period. If a better offer comes in, the first buyer must make a choice.

They can waive the conditions and finalize the transaction.
They can void the transaction and receive their deposit back, freeing the seller to accept the new offer.

Are you or someone you love planning to downsize your home? You’ll find plenty of valuable tips in the posts below:

Can You Put an Offer on a House That Is Conditionally Sold in Ontario?

This is a common question, particularly in a busy market where buyers may face some competition. The simple answer is yes, you can place what is called a “backup offer,” but it can get complicated. Your approach will differ depending on whether or not the seller has an escape clause on the original offer.

With an escape clause, you can produce a better offer, perhaps at a slightly higher price or with fewer conditions. If it’s compelling enough, the seller might trigger the escape clause and force the original buyer to make a decision. Ideally, you’ll want to add a condition that your backup offer is binding only if the first offer becomes null and void.

You can still place a backup offer even if the seller doesn’t have an escape clause. However, the seller is legally bound to the original buyer. Offering more money or better terms won’t necessarily win you the home as they are compelled to honour the original agreement. The chances of success are lower as there is little motivation for the first buyer to strengthen their offer. All you and the seller can do is wait.

There is also an element of risk here if you are not careful. If you place a backup offer and the original offer falls through, you’ll become legally bound to that property – unless your offer is written in a way that protects you and allows you to keep hunting for a new home.

Crafting compelling, well-written offers that protect your interests requires expertise and a deep understanding of all possible scenarios. It’s one of the primary reasons to work with a knowledgeable real estate agent when buying a home. With the correct guidance, you can look forward to a seamless experience.

Are you in the planning stages to buy your next home? Our Etobicoke real estate agents are here for anything you need. Reach out today at 647-282-7653 or email contact@sileckythompson.com with any questions or to get started.