Evaluating the Risks of Condition-Free Offers in Calgary, Alberta

In Calgary's highly competitive real estate market, limited supply means sellers often receive multiple offers. To stand out, some buyers might consider making condition-free offers. However, the Real Estate Council of Alberta (RECA) advises that this strategy carries significant risks.

Understanding Conditional Offers

Typically, offers to purchase a home are conditional, including specific criteria that must be met before the sale can be completed. These conditions, clearly written into the offer, must detail how and when they will be met. If the conditions are not waived by the agreed deadline, the offer becomes void.

Common Conditions

1. Financing: Ensuring the buyer can secure a mortgage.
2. Home Inspection: Allowing the buyer to approve the home's condition.
3. Condominium Document Review: For buyers of condo units, reviewing all relevant documents.
4. Sale of Current Property: Buyers needing to sell their current home first.

Importance of Conditional Offers

Conditional offers protect buyers, allowing them to perform due diligence such as home inspections and securing financing. They also provide time to review crucial documents like the title or condominium papers. 

Mortgage Pre-Approval

Be aware that mortgage pre-approval is not a guarantee of final financing. Pre-approval is based on preliminary financial information and does not consider the specific property details that could affect the loan.

Risks of Condition-Free Offers

If a buyer cannot complete the purchase, perhaps due to financing issues, they may forfeit their deposit and face legal action from the seller. It's crucial to discuss any plans for a condition-free offer with your real estate licensee and mortgage broker to understand the potential implications fully.

Final Advice

Always consult with your real estate licensee and mortgage broker before considering a condition-free offer. RECA licensees are required to advise their clients about the risks and potential consequences of such offers.

As your trusted Realtor, I'm here to help you navigate these complex decisions and ensure a smooth and secure home buying process.