What is a conditional offer?
When a buyer offers to purchase the home from the seller as long as specific conditions (i.e. financing) are met within a specific period of time. The buyer and seller will both need to meet these conditions within the timeframe, which is usually 2-7 days, for the purchase to go through. If the conditions are not met, the offer is considered void and the deposit will be returned to the buyer.
What is a conditional financing offer?
Conditional on financing means that the buyer must secure a mortgage/financing from a lender to purchase the home for the home purchase to go through. During the 2-7 days that the financing takes place, the goal is for the buyer to work as hard as possible “in good faith” to get approved for a mortgage.
How to be prepared without a conditional offer
Getting pre-approved for a mortgage before you put in an offer is a great way to secure yourself if the seller does not allow for a conditional offer. A pre-approval is not 100%, however, it provides the security of knowing that a financial institution will lock in a rate and lend you a specified amount of money. We highly recommend home buyers get pre-approved before they start home shopping.
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