Any game worth playing has a good set of rules, and the terms and conditions laid out in a purchase contract are like the rules of a complex game. Most of these rules are written by the buyer, some by the seller, and all are agreed upon by both parties. Games are no fun if you make up rules as you go along, so be sure to establish clear terms and conditions as soon as possible.
Home sales are subject to the terms and conditions of a contract. Terms must be executed by possession day, while conditions have to be met much earlier on.
Conditions make or break the contract. Many conditions in a contract fall under the responsibility of the buyer. For example, a buyer may agree to buy the property subject to the condition of obtaining financing. If they don’t complete the conditions, they can back out of the sale with no penalty. Sellers can have conditions too. For example, selling on the condition that their family finds a new home to purchase by a certain date.
The buyer and/or seller will “waive conditions” when they’re satisfied the conditions have been met, after which point their deposit becomes non-refundable. On the other hand, if the conditions aren’t met, the buyer can take their deposit and leave.
Here are some conditions we’ve seen throughout the years:
- a property inspection
- a review of condo documents
- the sale of the buyer’s house
- a satisfactory sleepover by the buyer
- pet approval from the condo board
- a lawyer reviewing and approving the contract
- a rezoning application being approved
- the review and approval of basement renovation permits
- the buyers meeting the neighbors
- the buyers meeting the sellers
- an electromagnetic field test
- air quality testing
- an exterior painting quote
- the buyer’s spouse/children/parent(s) liking the property
- the buyer seeing it in person (i.e. if the real estate agent has made the deal on behalf of a client who is out of the area)
A term, on the other hand, is an action agreed upon by both the buyer and the seller to be fulfilled on or before possession day. A term is most effective when there is a monetary penalty associated with not fulfilling it.
Examples of terms:
- The home must be professionally cleaned.
- Carpets must be professionally shampooed.
- Regular professional lawn care leading up to possession day.
- The seller will have the swimming pool drained prior to possession day.
- The Seller will fix the deficiency found in the home inspection prior to possession day.
- The Seller will meet with the buyers and give them a tour of the home operations.
If there are specific things you need or want in a contract, ask! The worst that can happen is a “no.”