A conditional offer is when both parties agree to a decision only if certain requirements or conditions have been met. Conditional offers are made in the real estate industry when the buyer agrees to purchase a house, but the offer is contingent and depends on the processing of certain things. The sale of the house depends on certain factors that need to be processed first. Conditional offers are extremely common in the real estate sector. An example of a conditional offer is when the buyer agrees to purchase a house only after the sellers carry out a home inspection. Once the conditions of the offer have been met, then the buyer or seller cannot go back on their word. However, if the conditions are not met, both parties have the right to withdraw from the deal without facing any legal consequences. A conditional offer consists of a time frame that is generally very short since the property owner does not want to keep the property tied up for a long time. Invest in Lahore Smart City.
Types of conditional offers
The conditional offers for real estate properties may depend on several different factors. It gives the buyer the protection to get the assurance that they need without the risk of the property being sold to some other buyer. Until the time frame of the conditional offer finishes, the seller is not allowed to sell the property to any other buyer. Below are among the most common examples of conditional offers.
The sale of the current house
Most of the time, the buyer will first have to sell their own house before they can invest in any other property. Hence the sale of their present house is placed as a condition because they cannot afford to purchase another property when their money is tied up. If the buyer plans to use the money earned through the sale of their current house to pay the down payment, then this condition is justified. Invest in Kingdom Valley Islamabad.
Bank financing
 The real estate deal depends on whether the buyer manages to get the mortgage approved by the lenders or not. Hence loan approval is a common condition placed by the buyer when making a conditional offer for a property. If the buyer cannot secure the financing, then the conditional offer will cease the exist, and the seller will be free to sell the property to other buyers. Many things can go wrong with the financing last minute that can nullify the deal. For example, the bank might approve an amount that is lower than the house’s market value to which the seller would not agree. In this case, the buyer will either have to pay the rest of the money from their own pockets, or they will have to withdraw from the offer. Moreover, if the buyer already has an existing loan, they will first have to pay that before purchasing any other property on a mortgage.
Renovation and building permits
A conditional offer may depend on the local authorities’ decisions to give the buyer renovation or building permits. Most buyers make extreme changes to the property once they have bought it, completely changing its outlook. These changes include landscaping, repaying the driveway, making a porch, expanding the garage, and making a swimming pool. Some buyers also convert residential properties into home-based business centers. To make these changes, the buyer will have to get permission from the local building authorities; otherwise, the changes will be illegal. The local authorities do not allow homeowners to carry out changes in some areas and require builders to provide proper building plans. You should also know about Blue World City.
Conclusion
Conditional offers are often used to exploit the other party, giving way to a lot of fraud. The seller or the buyer may use the conditions as an excuse to back out from the deal, leaving the other party stranded. Conditional offers also discriminate against older buyers or buyers belonging to minority groups. However, despite everything, conditional offers are necessary for certain conditions and provide a safe exit for both the buyers and the sellers.
Author Bio
Ramza Zahra is a Karachi-based freelance content writer who uses her life experiences and curious nature to research and pen it down and make a living. Currently, she is working with Sigma Properties as an Snr. Content Writer.
