Definition
A conditional offer is a purchase offer in which the buyer's commitment is subject to the fulfillment of one or more conditions within a set deadline. If the condition is not lifted on time, the offer is automatically cancelled and the fiduciary deposit is refunded.
Most common conditions:
- **Financing condition** (7-14 days): the buyer must obtain satisfactory mortgage approval. This is the most important condition — without it, the buyer risks losing their deposit if their application is rejected. - **Inspection condition** (5-10 days): a building inspector inspects the property. If significant defects are detected, the buyer can cancel or renegotiate. - **Sale condition**: the buyer must sell their current property before completing the purchase. Often refused by sellers in an active market — it may trigger an escalation clause or a 72-hour clause (the seller can receive another offer and give the buyer 72 hours to lift the condition).
In a seller's market (like Montreal 2020-2022), unconditional ('firm') offers were almost mandatory to be competitive. In a more balanced market, conditions protect the buyer without major commercial disadvantage.