Congratulations you have found the house of your dreams! Now, working with a real estate agent you need to create an offer to present to the sellers. Your real estate agent will help you through this process but when it comes to a conditional offer, it is important that you know your options and what each means. But to start, you should know the difference between a conditional offer and a firm offer. A firm offer is when the buyers are ready to buy the house without any conditions, including a home inspection. A conditional offer means that there are conditions to the sale. To further explain this, here are the 3 most common conditional offer options.
A Home Inspection
To avoid any unwanted surprises or future repairs, it’s a safe option to request a home inspection on the house you intend to buy. Home inspections cost around $500 and are done by a licenced home inspector. There are some situations in which you will not need a home inspection condition like when purchasing a new home or if you request a pre-inspection that takes place before an offer is made.
Even before looking for a home you need to get pre-approved for a mortgage. It does not guarantee your mortgage will be approved but it will confirm the maximum mortgage you can be approved for. If you have made an offer with the condition of financing, it means that if your mortgage is declined you can walk away from the property. Your mortgage does depend on a home appraisal required by your lender. To learn more about how a home appraisal can impact your mortgage click here.
The Sale of the Buyer’s Existing Home
If you have to sell your existing home before an offer on the new home can be considered firm, you will need to add this condition to your offer. This protects you from carrying two homes at the same time, but it could also leave the seller waiting a long time for the sale of their property to the firm. Sellers will likely not accept this conditional offer because it does put them in an uncomfortable and potentially risky situation.
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