When buying or selling a home, conditions—also known as contingencies—serve as important safeguards within a real estate purchase agreement. These conditions outline specific requirements that must be met for the transaction to proceed, ensuring that both the buyer and the seller are protected throughout the process.

Why Are Conditions Important?

Conditions help to create a fair and transparent transaction by setting clear expectations for both parties. They provide buyers with the opportunity to conduct due diligence, while also giving sellers assurance that the deal will proceed under agreed-upon circumstances. While conditions can vary based on the specific transaction, some of the most common include:

1. Financing Condition

This condition allows the buyer time to secure mortgage approval. If the buyer is unable to obtain financing within the agreed timeframe, they may withdraw from the purchase without penalty.

2. Home Inspection Condition

A home inspection contingency gives the buyer the right to have a professional inspect the property. If significant issues are discovered, the buyer may negotiate repairs, request a price reduction, or choose to walk away from the deal.

3. Appraisal Condition

If a lender requires an appraisal, this condition ensures that the property is valued at or above the agreed-upon purchase price. If the appraisal comes in lower than expected, the buyer may renegotiate or reconsider the purchase.

4. Sale of Buyer’s Current Home

Some buyers need to sell their existing home before completing a new purchase. This condition allows them time to do so, protecting them from owning two properties simultaneously.

5. Title and Legal Review

A title search ensures the property is free of legal claims, disputes, or liens. If any issues arise, the buyer has the right to withdraw or request that the seller resolves them before closing.

How Conditions Impact the Sale Process

Buyers and sellers must agree on which conditions will be included in the purchase agreement and the timeline for fulfilling them. If a condition is not met by the deadline, the buyer may have the option to walk away, renegotiate terms, or request an extension.

Waiving Conditions: What to Consider

In competitive markets, some buyers may choose to waive conditions to make their offer more attractive. However, this comes with risks. For example, waiving a home inspection could leave a buyer responsible for unforeseen repairs. It’s essential to weigh the benefits and risks before deciding to remove any conditions.

Conditions are an essential part of a real estate transaction, offering protection and clarity for both buyers and sellers. Understanding the role they play can help ensure a smoother and more secure home-buying or selling experience. If you’re unsure about which conditions to include in your agreement, consulting with a real estate professional can provide valuable guidance tailored to your specific situation.