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3 Tips if Going Unconditional on Your Next Home Offer

Author: Cody Rowe - Mortgage Broker |

 Blog by Cody Rowe - Mortgage Broker

The real estate market in Canada has continued to remain strong and competitive despite the state of interest rates. Partly due to the low supply of homes for sale, we are once again seeing multiple offers on properties. To compete, your real estate agent may advise that an unconditional offer is required to get your offer accepted. Here are three tips if you are considering making an unconditional offer:

3 Tips If Going Unconditional

Get a Pre-offer Home Inspection

When you complete a pre-approval, by that time you should know where you stand regarding your income, down payment and credit and if there is any financing concerns around that. But what about the property your purchasing?

If you submit an unconditional offer, and later find out there are deficiencies with that property that detour you from wanting to buy it, too bad. You’re now stuck with a home that you don’t really want or will now need to put a bunch of money into to repair.

What’s worse, is that those deficiencies could make it difficult to get financing for. Asbestos, remediated grow ups, significant prior water or fire damage are just a few examples of how a property can be declined by a bank for financing.

To remove these concerns and setbacks from the equation, pay the money upfront to get a proper home inspector to come by and do a thorough inspection of the home. They will look for mold, asbestos, foundational issues, water and fire damage, rodent issues and everything else you need to be aware of. This way, you remove significant variables when placing an unconditional offer.

3 Tips If Going Unconditional

Talk to Your Mortgage Broker About Your Backup Options

If you are in a position where an unconditional offer is required to compete, you’ll need to know your backup financing options in case your preferred lender backs out for any reason.

Generally speaking, if you are putting less than a 20% down payment, it’s advisable to not submit an unconditional offer. This is because you will not have access to alternative or private financing, which in the worse case scenarios can ensure you complete on your purchase and avoid getting sued by the seller for not completing. However, speak to your broker and determine what risks are apparent and how you can mitigate those concerns by considering other banks that may not be your first choice, but will get the job done for you if it comes down to the 11th hour. 

Knowing the worse case scenario of your financing, will give you insight and an opportunity to prepare for this situation. Figure out if in the worse case scenario whether the payments are still affordable or if you may need to make remissions such as renting out a bedroom, skipping on renovations for a bit or cutback on expensive hobbies.

3 Tips If Going Unconditional

Remember the 3-Day Cooling-Off Period (BC Real Estate Only)

If you are submitting an offer in British Columbia, as of January 3, 2023 there is a new 3-day cooling period referred to as the Home Buyer Rescission Period where even if you have submitted an unconditional offer, you may back out of that offer for any reason at all without the risk of liability or being sued. Very important to keep in mind that if you submit an unconditional offer and back out during this cooling off period, you are still subject to a penalty equal to 0.25% of the purchase price (what you offered) but this is a heck of a better option then getting sued or having to buy to a home you don’t really want!

Do you have questions about your next home purchase? Shoot us an email, give us a call or click the link below to schedule a chat!

3 Tips If Going Unconditional

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