Common conditions to include in an offer to purchase

In British Columbia, most buyers usually attach at least one or more conditions to their Offer to Purchase a home. In real estate terminology, a “condition” is any legal or financial requirement that must be satisfied before the sale can officially go through.

While each property and purchase are different, these are some of the most common conditions that B.C. homebuyers tend to include with their offers:

·      Financing—a clause that says your offer is conditional on whether or not you get approved for a mortgage to buy the property. Most financing clauses give the buyer a set number of days to obtain final financing approval from their bank or lender, offering them a way out of the deal if they can’t obtain a mortgage in time.

·      Sale of Property (SOP)—if you haven’t sold your current home yet, adding a Sale of Property (SOP) or “subject to sale” condition to your offer makes buying your new home contingent on being able to sell your existing property (usually within a certain reasonable amount of time).

In addition to relieving some of the immediate stress and pressure, including an SOP clause with your offer can help make sure you don’t end up owning two homes (or having to pay two mortgages) at the same time.

·      Home inspection—a condition that makes the offer contingent on having a professional home inspector carry out a thorough assessment of the roof, plumbing, HVAC, electrical systems, foundation, and other structural aspects of the property.

If any serious defects or hidden problems are discovered during the inspection, the buyer can choose to either go ahead with the purchase anyway, re-negotiate the price to cover the cost of the repairs, or walk away and cancel the sale completely.

·      Property appraisal—a requirement for the seller to allow your bank or lender to appraise the property in order to confirm that it’s actually worth what you’ve agreed to pay for it – and that it fits within the total amount of the mortgage for which you’ve been approved.

·      Land survey—an added clause that makes any sale dependent on carrying out a professional survey of the property you’re interested in, to make sure you get exactly what you’re paying for.

·      Title review—a condition that lets your lawyer check for any liens, encroachments, ownership disputes or legal claims that have been filed against the property that could cause personal or financial stress down the road, or potentially derail the sale entirely.

·      Strata documents review—a condition included with most offers to purchase a condominium that gives you, your lawyer and your REALTOR® the right to review all the annual budgets, reserve fund statements, condo rules and other strata documents before you buy the unit. This can help you avoid any unpleasant surprises, like making sure there aren’t any upcoming assessments you may be on the hook for.

·      Insurance—confirmation that the property doesn’t have any problems like an outdated electrical system, major structural issues, or a location that’s prone to flooding which could prevent you from getting home insurance.

·      Cleanliness—a requirement for the seller to make sure the home has been professionally cleaned before the sale is complete or the buyer moves in.

·      Fixtures and chattels—a condition that spells out exactly what is or isn’t included in the purchase, so you can make sure that any appliances, window coverings or other non-permanent features or fixtures you want included in the offer are still there and in good condition when you move in.

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Do you have any other questions about the conditions you can expect to add or encounter when buying a residential property in B.C.? Contact us to schedule your free consultation today!