When buying or selling a home in Alberta, one of the most common terms you’ll encounter is a conditional offer. Unlike a firm offer, which is binding immediately, a conditional offer means the sale will only proceed if certain conditions are met within a specified timeframe.

These conditions are designed to protect both buyers and sellers, but they also introduce some uncertainty into the transaction. Understanding how conditional offers work can help you make informed decisions, whether you’re purchasing your first home or selling a property in a competitive market.

What is a conditional offer?

A conditional offer is an agreement between a buyer and seller that the property will be sold once specific requirements are satisfied. Conditions are usually tied to inspections, financing, or legal approvals. If the conditions are met by the deadline, the offer becomes firm. If not, the buyer may withdraw without penalty, and the seller is free to relist or entertain other offers.

Common real estate conditions

Here are four common conditions:

1. Financing approval

Perhaps the most common condition, financing ensures the buyer can secure a mortgage. While buyers may already be pre-approved, lenders often require a full appraisal of the property before finalizing the loan. This condition gives buyers time to confirm funding and protects them from being locked into a purchase they can’t afford.

1. Home inspection

A home inspection allows buyers to assess the property’s condition, including major systems like plumbing, roofing and electrical. If serious issues are uncovered, buyers can negotiate repairs, request a price reduction or walk away altogether.

1. Sale of buyer’s current home

In some cases, buyers make their offer contingent on selling their existing home first. This reduces their financial risk but can be less attractive to sellers, as it ties up the property for longer.

1. Condo document review

For condominium purchases, buyers often require time to review condo board documents. These provide insight into the building’s financial health, bylaws, reserve fund and potential special assessments.

Timelines and deadlines

Conditional periods are usually short, ranging from 3 to 7 business days, depending on the nature of the conditions. For example, inspections might be completed within a week, while financing may require a bit more time. Both parties must agree to the deadlines, and extensions can be requested but not guaranteed.

What buyers should know

Here’s what buyers should be aware of:

• Don’t skip due diligence – Even in a hot market, it’s risky to waive conditions unless you are absolutely certain of your financing and the property’s condition.
• Act quickly – Schedule inspections, provide documents to your lender and review condo bylaws promptly to avoid missing deadlines.
• Be realistic with conditions – Adding too many or overly broad conditions can make your offer less appealing to sellers. Strike a balance between protection and competitiveness.

What sellers should know

Following is what sellers need to consider:

• Conditional offers still show serious interest − Most buyers will submit conditional offers: it’s a standard part of he process. Don’t dismiss them outright.
• Set clear deadlines − Shorter conditional periods reduce uncertainty and prevent your property from being tied up for too long.
• Backup offers − Sellers can accept backup offers, which only take effect if the first conditional offer collapses. This provides extra security in case the deal falls through.
• Consider the buyer’s position − An offer with fewer or shorter conditions might be more attractive than a higher-priced one with lengthy conditions.

When conditions are met, or not

If the buyer satisfies all conditions, the offer becomes firm and both parties are legally bound to complete the sale. If conditions are not met by the deadline, the deal collapses and deposits are typically returned to the buyer. In rare cases, disputes may arise, which is why clear contracts and legal advice are important.

In closing

Conditional offers are a standard feature of Alberta’s real estate market. For buyers, they provide essential protections during one of the biggest financial decisions of their lives. For sellers, they require patience and strategy to ensure the deal moves forward smoothly.

Whether you’re buying or selling, I’m more than happy to explain all aspects of conditional offers to help you navigate the process with confidence and reduce the stress of uncertainty.