Ask a Wahi REALTOR®: What Conditions Do You Recommend Including in an Offer, and Why?

Wahi Broker of Record Anne Alkok recommends three conditions that homebuyers should consider adding before putting in an offer on a property.

By Josh Sherman | 2 minute read

Putting in an offer on a home is an exciting time, but buyers shouldn’t get carried away in the moment and neglect to do their due diligence.

Part of the lead-up to making an offer should include determining whether or not to submit it with conditions.

“A condition in a real estate contract is something that must happen before the deal is final,” explains Wahi Broker of Record Anne Alkok. “If the condition isn’t met, the party it was meant to protect can walk away without penalty. If the condition is satisfied, or they waive the requirement, the contract becomes fully binding on both parties,” she continues. In a seller’s market, some homebuyers may choose to forego conditions in a bid to make their offer more competitive. Such a decision ultimately comes down to a homebuyer’s risk tolerance, but anyone in the market for a property should at least consider adding one or more of the following three conditions, Alkok suggests. 

1. Financing 

A financing condition is one of the most common conditions that Alkok, who has 20 years of experience in the real estate industry, comes across. “I always recommend including a financing condition in your offer, even if you’ve already been pre-approved for a mortgage,” says Alkok. This type of clause allows the homebuyer to walk away from the deal if they can’t secure an appropriate mortgage for the property. “This gives your lender time to confirm that the property is worth the price you’re offering to pay,” Alkok continues. “If the appraisal comes in lower than your purchase price, you could be responsible for covering the difference between the appraised value and the agreed-upon price.”

2. Home Inspection

Another useful condition is one that dictates the property must pass a home inspection before the deal can close. “A home inspection gives buyers a clear picture of a property’s condition, helping them plan for future costs and avoid surprises,” Alkok explains.

Typically, the buyer foots the cost of the inspection, which is just one of the common hidden costs that homebuyers often overlook. Expect to pay around $500 for the service, which involves a home inspector conducting a walk-through of the property to create a detailed report on its condition. “If major issues are uncovered, it also creates an opportunity to negotiate repairs, adjust the price, or even walk away if necessary,” Alkok adds.

3. Status Certificate  

Those in the market for a condominium might want to insist on reviewing a status certificate before making the final commitment. A status certificate is a document that provides an overview of the unit as well as the condo corporation that it is a part of. “For buyers (and their lawyers), the status certificate is critical because it reveals the financial stability of the condo corporation and any red flags — like lawsuits, special assessments, or underfunded reserves — that could affect future ownership costs,” says Alkok. The certificate also details specific rules that apply to the building, such as restrictions on pets or short-term rentals.