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Conditional Sale

Learn what a conditional sale is in Canadian real estate, how it protects both parties, and what happens if conditions aren't met by the deadline.

Conditional Sale

May 22, 2025


What is a Conditional Sale?

A conditional sale is a real estate transaction that becomes legally binding only when specific conditions outlined in the offer are fulfilled within a set timeframe.

Why Conditional Sales Matter in Real Estate

In Canadian real estate, conditional sales provide both buyers and sellers with protection during a transaction. Common conditions include:
- Financing approval
- Home inspection
- Sale of the buyer’s existing home

These conditions must be satisfied by a deadline specified in the agreement. If a condition isn’t met (e.g., the buyer can't secure financing), the buyer can typically walk away without penalty.

Conditional sales are especially important in markets where buyers need flexibility or additional assurances. Sellers may accept such offers depending on market conditions or the buyer's financial strength.

Once all conditions are met, the sale becomes ‘firm,’ and both parties are fully committed. Failing to meet or waive the conditions by the deadline can terminate the deal, so clear communication and prompt action are essential.

Understanding conditional sales helps buyers protect themselves while ensuring sellers understand the implications of accepting conditional offers.

Example of a Conditional Sale in Action

A buyer purchases a home in Edmonton with a condition that their current house sells within two weeks. Once it sells, the conditional sale becomes firm.

Key Takeaways

  • Sale depends on meeting agreed-upon conditions.
  • Common in buyer-friendly or balanced markets.
  • Typical conditions include financing or inspection.
  • Protects both buyer and seller from unforeseen issues.
  • Sale becomes firm once all conditions are fulfilled.

Related Terms

Additional Terms

Rent Control

Rent control refers to government regulations that limit how much landlords can increase rent for residential tenants each year.. more

Receivership

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or. more

REALTOR

A REALTOR is a licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to its Code of Ethics and. more

Property Use History

Property use history refers to the documented past uses, functions, and occupancy of a property, which may affect environmental risk, zoning, or. more

Property Management

Property management is the oversight and administration of real estate assets on behalf of the owner, covering leasing, maintenance, financial. more

Property Maintenance

Property maintenance refers to the ongoing upkeep, repair, and management of a building or land to preserve its safety, functionality, and appearance.. more

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