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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

  • Conditional Offer
  • Firm Sale
  • Financing Condition
  • Home Inspection Contingency
  • Real Estate Contract

Additional Terms

Bridge Financing

Bridge financing is a short-term loan that helps homebuyers cover the financial gap between buying a new property and selling their existing one.. more

Bridge Loan

A bridge loan is a short-term financing option that allows homeowners to borrow against the equity in their current property to fund the purchase of. more

Firm Offer

A firm offer is a legally binding agreement to purchase a property that contains no conditions. Once accepted, it commits both the buyer and the. more

Foreclosure

Foreclosure is a legal process through which a lender takes ownership of a property when the borrower defaults on their mortgage payments.. more

Closing Costs

Closing costs are the various fees and expenses that buyers and sellers must pay to finalize a real estate transaction, separate from the property’s. more

Assignment Sale

An assignment sale occurs when the original buyer of a property (the assignor) sells their rights in the purchase agreement to a new buyer (the. more

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