Conditions are protections, not obstacles

Somewhere along the way, conditions got a bad reputation. Buyers are told a "clean offer" wins, and sellers are told conditions are a nuisance to be negotiated away. Both are half true and both miss the point.

A condition is a window. It is time you buy for yourself to find out whether the thing you just agreed to buy is actually what you think it is, with the right to walk away if it is not. Removing one does not make the risk disappear. It moves the risk onto you.

Every condition you give up is a question you have decided not to ask.

The four I start with

Most offers I write include some combination of these. In order of how often they save someone:

1. Financing

A pre-approval is not a mortgage. It is a lender's opinion about you, formed before they had any opinion about the property. The financing condition is where the lender looks at the actual house, orders an appraisal if they want one, and confirms they will fund this specific purchase.

This matters more on unusual properties. Rural, small square footage, unconventional construction, anything with a rental unit. Those are the ones where a lender's answer can change once an address is attached.

2. Home inspection

Not to find a perfect house, because there isn't one. To find out what you are taking on and roughly what it costs. An inspection turns "the furnace looks old" into a number and a timeline, and that is what lets you decide calmly instead of guessing.

3. Insurance

This is the one most people leave out, and it is the one I would fight hardest to keep.

You can be fully approved for a mortgage and still be unable to close, because you cannot get the house insured. Knob and tube wiring, aluminum wiring, an old oil tank, a wood stove with no WETT certificate, a roof past its life, a history of claims on the property. Any of these can make an insurer say no, or quote a number that changes the math on the whole purchase.

It costs a phone call to check. It costs a great deal more to find out after the offer is firm.

4. Lawyer review

Title, easements, work orders, open permits, what the survey actually shows. There are things only a real estate lawyer can properly tell you, and it is much better to hear them while you still have the right to change your mind.

What conditions are not

They are not a way to tie a property up while you keep shopping. Sellers know the difference, other agents know the difference, and it damages your credibility on the next offer. Ask for the time you actually need and then use it.

The trade-off in a competitive market

In multiple offers, conditions cost you something. That is real and I will not pretend otherwise. What we do is decide deliberately which ones to shorten and which ones to keep, based on the property in front of us rather than a rule.

A twelve-year-old townhouse with a recent roof and a modern panel is a different risk than a 1950s rural bungalow on a well. The first might justify a tighter offer. The second is where I would rather lose the house than write it clean.

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Written by Mike Elsey, Broker, Royal LePage Real Estate Associates, Brokerage. General information about the process in Ontario, not legal, financial, tax, insurance or inspection advice.