4 common conditions home buyers will include with their offer

If you are buying a home, should you include any conditions in your offer? There are many common conditions home buyers might want to add into their offer to protect themselves. These are often important for the buyer’s security and peace of mind. Even in the most competitive markets, there are some conditions you should always include if they are necessary for you. Here are four conditions that you shouldn’t skip out on if they are essential to your finances!

#1 Passing a home inspection

One of the best ways to protect yourself as a home buyer is to include a condition in your offer that requires your new home to pass an inspection. A home inspection is the process of having a professional come in to examine the property for signs of damage or danger. They will look for structural damage, plumbing or electrical issues, mold, pest infestations, and any other potential deficiencies. If anything turns up, you as the buyer have a couple options. You can either work with the seller to negotiate repairs or a lower purchase price, or you have the option to walk away from the sale completely. 

Why would a buyer include a home inspection condition? If an inspection reveals significant issues, this gives the buyer the chance to address them before the sale closes. If no inspection is done, and buyers discover major problems after they become the legal owners, the responsibility falls on them to arrange for repairs. This can be financially draining, depending on the extent of the problems. An inspection helps you avoid this danger.

#2 Selling current home 

Another common condition for a buyer to include with their offer is the need to sell their existing home before they can legally commit to the purchase. This, of course, impacts buyers who are already home owners. While first-time buyers save for a down payment over time, existing home owners often rely on the sale of one home to support the purchase of another. Without those funds, many buyers find it difficult or impossible to buy their next property. 

In competitive markets, this condition might make an offer slightly less attractive to sellers. Sellers naturally prefer offers with little or no conditions attached. However, if it is essential to your financial security, you should still include this condition!

#3 Passing an appraisal 

This is one of the most important of the common conditions to include with an offer! When you buy a home, your lender will likely require an appraisal. This process determines the value of the home you are buying. For a lender, it ensures they are providing financing that matches the home’s worth. Traditional lenders typically will not finance a mortgage for more than a home’s true value.

In competitive markets when offers are higher than listing prices, appraisal conditions become even more essential. If the property does not appraise at a buyer’s offer price, this means the lender will not finance the entire mortgage amount. They will likely provide financing for the home’s appraised value. If your offer is conditional upon the home passing an appraisal, this protects you from having to go through with the sale. Otherwise, you are committed to the purchase, and will need to find a way to provide the financing yourself.

#4 Securing mortgage approval

This is a super common condition for first-time home buyers in particular. It gives the buyer time to secure the mortgage financing they need before the sale is official. If a buyer’s mortgage application is not approved for any reason, this condition allows them to walk away without any penalty. Without this condition, buyers can find themselves in a tough situation if they cannot get the financing they need but have already legally committed to the purchase. This is a condition every buyer should include. Even in competitive markets, it’s essential for your financial protection. Most sellers will also be understanding of this condition and it shouldn’t have a huge impact on the attractiveness of your offer. 

There are many common conditions that buyers might include in their home buying offer. However, these are the most frequent, and often the most important. Buyers often try to keep their offers as clean as possible, but including necessary conditions protects you during the buying process. If you are about to embark on your home buying journey, feel free to reach out to your local mortgage broker! By working with a broker, you can be sure you are giving yourself the best head start possible in today’s market.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.