What Does Sold Conditional Mean?

Real estate transactions are inherently complex. Unlike typical retail purchases, a home sale involves many more variables than a simple exchange of money for goods.

There are various stages of a home sale, including Sold Conditional, in which the buyer and seller can take on unique responsibilities to ensure the sale closes.

In this article, we will explore the term sold conditional, its definition, and what buyers and sellers should understand about conditional offers and sales.

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What is a Conditional Offer?

Before exploring the meaning of sold conditional, it’s important to understand how buying offers work. Purchase offers outline countless key details of the transaction – far more than simply the price and possession date.

In today’s market, most buyers will outline a few stipulations as part of their purchase offer. These contingencies, known as conditions, allow buyers to protect their interests ahead of one of the largest investments in their lifetime.

Any offer that includes conditions is known as a conditional offer. When the seller accepts a conditional offer, the property becomes sold conditional.

As a note, although conditions are a common and generally effective avenue for protecting one’s interests as a buyer, it is not outright mandatory to include them when placing an offer on a home. Under certain circumstances, such as highly competitive seller’s markets, buyers may choose to forgo conditions to increase the appeal of their offer.

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After a conditional offer has been placed on a home, the buyer and seller will engage in negotiations through their professional representatives (real estate agents). Once an agreement is reached on the terms of the offer, the home is considered to be sold conditional. It may also be referred to as conditionally sold, a synonymous designation.

Once a home is sold conditional, there is an official deadline for each condition in the contract to be fulfilled – often between three days and one week, depending on the contingency itself. However, if conditions are not met within the designated timeframe, the conditional sale is no longer binding.

How Often do Conditional Sales Fall Through?

There’s a difference between a property that is sold, and one that is conditionally sold. A home may be sold conditional, but that does not guarantee that the transaction will be finalized.

Although relatively uncommon, conditional sales in Toronto can fall through. When this does happen, it’s never by chance or accident. If a conditional sale fails to close, it is likely due to some major adversity.

When a transaction falls through, it can be stressful for all parties involved. With that in mind, the right preparatory steps, such as a pre-listing home inspection for sellers or seeking mortgage pre-approval for buyers, can mitigate these risks.

Searching for strategic guidance on buying a home? Consider these related readings for more insights.

What is an Escape Clause in Real Estate?

You may encounter a listing with “SC Escape Clause”, and you may be be wondering what does SC Escape Clause mean? Conditional offers are, in essence, designed to protect buyers. However, there are certain options for sellers who are similarly looking to safeguard their interests while the home is conditionally sold – such as an escape clause.

When a home is conditionally sold, it is not yet off the market. With that in mind, what happens if a second buyer places an offer on a home that is sold conditional and the price or terms are more attractive compared to the initial offer?

A sold conditional escape clause allows sellers to entertain other offers while the home is conditionally sold. However, they must inform the buyer if they receive a different offer and intend to pursue it.

The buyer then has the opportunity to waive their conditions to compete with the second offer. Or, they may be able to cancel their offer altogether.

Buying With Christensen Group

If you’re looking to make a sound real estate investment in the complex Toronto market, you won’t want to go in alone. With over four decades of experience, Christensen Real Estate Group makes the process of finding your next home seamless.

Whatever your ideal property looks like, our accredited and experienced team will work tirelessly to secure the best possible price, terms, and conditions on your purchase. Beyond protecting your interests today, your strategic investment will set you up for success as you pursue larger real estate goals in the future.

Buying in Toronto? Work with industry experts. Call 416.772.4723 or email us at info@christensengroup.ca to begin.

What is a Conditional Offer?