Conditions and Terms

Understanding terms and conditions

Most contracts have specific terms and conditions in the offer when once agreed upon needs to be explored and either are satisfied by you; or give you reason to terminate your offer to purchase.  These conditions give you some protection from making bad purchase.

Let’s explore some conditions:

Normally, before you even start shopping, you go to your lender or broker to arrange a mortgage.  You should have a pre-approved mortgage before you make an offer on a property.  This pre-approval is more of verifying you and your finances to qualify for the loan.

The next phase is having the lender secure the actual mortgage to the specific property you wish to purchase.  During this phase, the mortgage broker makes sure all of your income documentation is in and verified.  The broker also makes sure that the house qualifies with any insurance lender (CMHC, CG or GE Insurers) and is worth the purchase price that you ad the seller agreed upon.  Once the insurance/appraisal has been satisfied with the purchase price and quality of the property, the file is sent to the underwriter for final approval to secure the loan to the property.

Once the commitment is back, and the mortgage is secured, the mortgage broker will have you sign the loan documentation.  Then, and only then should you remove your condition to finance.

Property inspection condition

When you’re walking through a home you’re seriously considering buying, it’s often difficult to put aside your emotions and really “see” what kind of shape the property is in.  Few of us have the training to uncover the major structural flaws and maintenance problems that can result in expensive repair bills after you’ve bought the home.

That’s why you should hire a qualified home inspector to go over every square foot of the home – inside and out.  A home inspection gives you the security of knowing what to expect and helps you make an informed decision about the value of the home and the costs of future upkeep.

A comprehensive inspection includes an examination of the structure from top to bottom, including heating, air conditioning, plumbing and electrical systems, as well as the roof, visible insulation, walls, ceilings, floors, windows, doors, foundation and basement.  The inspector should provide you with a written report that summarizes the inspection and points out defects, maintenance items and approximate life expectancy of the major elements of the home.

Once you have had a chance to review the inspection, and have had time to explore any major issues that may have surfaced, and your satisfied with the quality of the product your purchasing should you remove your inspection condition.

Sale of buyer’s home condition

This condition is used to agree that you’ll buy the seller’s home if you can sell the home you currently own within a set period of time.  These agreements usually have an escape clause allowing the seller to continue marketing their home and in the event they obtain a second offer satisfactory to them, they agree to give you first right to firm up your deal with them (usually within 48 to 72 hours with written notice) or release you from the deal and pursue the transactional opportunity with the other buyers.

Additional buyer’s condition

What else is pertinent to you to give you peace of mind before closing the deal?  Other common conditions are:

  • Subject to legal review
  • Subject to the home’s repair
  • Subject to survey
  • Subject to appraisal
  • Subject to disclosure
  • Subject to bylaw approval
  • Subject to development review
  • Subject to home owners insurance

The seller’s conditions

Sometimes the seller’s might need to add a condition to the contract.  This means that they are only willing to sell you the property if a specific condition they need to fulfill is met, otherwise the contract can be terminated.

Common seller conditions are:

  • Seller to find a suitable property to move to
  • Seller’s lawyer to review and approve the contract


Terms are specific requirements that need to be acknowledge or fulfilled by either the buyer or the seller before acceptance of the contract or tended to before the closing day.  They can also be disclosure statements that bring awareness to the property.  These can be things like:
  • Home repairs that surfaced during the inspection
  • Disclosure reports
  • Removal of items from the property
  • Encroachments or easements of the land
  • Stigmas
  • Non-conformance issues
  • Or anything else brought to the attention of the buyer or seller by the buyer and seller

Removal of conditions

Only once you have fulfilled your purchasing conditions, and are satisfied with the purchase of your property should you lift your conditions in writing.  This needs to be done before the agreed upon time in your contract otherwise your contract becomes null-in-void, even if the condition removals are submitted one minute after what was stated in the contract.  Please, take care to honor these time restrictions.

Once conditions are removed you have a binding contract and are able to move onto closing.  At this time your deposit becomes security for the seller for you to close on the transaction.

Non-waiver of conditions

Sometimes during the conditional process, things surface that are beyond our control or are just not satisfactory to a buyer.  If a purchaser is unable to fulfill his or her contractual obligations in the offer to purchase or if something arose that is dis-satisfactory to the buyer from the property inspection or possibly the buyer and seller can not agree to agree upon a counter correction or term an offer to purchase can dissolve.
If walking away from the deal happens, you either sign a non-waiver that states you are not satisfying your conditions, or you allow the deal to laps past the conditional time and the deal becomes null-in-void.  Generally, unless otherwise specified, your deposit is returned to you.


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