When buying or selling a home, a conditional offer is an agreement that lays out the exact conditions that must be met before the deal can go through. In this blog post, we will discuss a conditional offer.

Understanding the Conditional Offer

A conditional offer is a contract between two parties in which the terms of an offer are contingent on fulfilling a specific condition. In real estate deals, for example, a buyer’s offer on a home is subject to the completion of certain activities. The sale cannot be completed until something happens.

Conditional offers are most frequently seen in real estate transactions. When a buyer agrees to buy a house subject to a home inspection, this is a conditional offer.

Common Types of Conditional Offers

1) Financing Conditional Offer

The term “contingency” refers to the buyer needing a mortgage to complete the transaction. Once the mortgage has been approved, the condition is removed from the contract. If buyers cannot get financing, they can back out of their agreement without paying any financial penalties. This real estate condition is extremely significant for purchasers since it might sometimes cause worry.

2) Home Inspection Conditional Offer

Suppose a house does not pass the home inspection due to a termite infestation, poor electrical wiring, roof damage, or other concerns. In that case, the buyer can withdraw from the agreement and receive their earnest money back.

3) Sale of Buyer’s Existing Home Conditional Offer

The sale of the buyer’s present residence allows the sale of the buyer’s current property. Before purchasing a new house, the buyer has a specific time to sell his/her current home. And if the existing property doesn’t sell, the agreement will be void with no penalty. It protects buyers from having to repay two mortgages at once if their present home isn’t sold after all. A seller who accepts a contingency buy offer may include a kick-out clause.

4) Appraisal Conditional Offer

Home buyers can back out of a contract containing an appraisal contingency if the property’s value isn’t greater than the sales price stated in the contract. If the property’s value is appraised above the purchase price, you are entitled to your mortgage as a buyer. If the appraisal value is lower than the purchase price, you have three choices as a buyer.

The first option, you can go back to the buyer and renegotiate the difference between the purchase price and the appraisal price.

The second alternative is for you as the buyer to cover the difference. The third choice is for the buyer to back out of the contract and have your earnest money refunded if they and the seller fail to reach an agreement.

Finally, you can challenge the appraiser if you come across better comparable properties or if there’s been a material mistake or issue with the appraisal.


It’s crucial to understand that conditional offers should be fair; nevertheless, there are no restrictions on what type of conditional terms the buyer or seller may request. There could be some unusual conditions. However, if you were a buyer writing a contract, too many contingencies might be off-putting for the seller.

Ready to break into the real estate market? Contact Hawkins/Ryerse Group today to discuss your needs!

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