Curtis Leibel 780-438-2500

Further to the last few posts, one of the many points to consider when buying a home is conditions.  When a property goes “pending” we mean that an offer has been accepted by the seller, and it is pending removal of conditions.  During this pending state, there is a legal document in place, meaning the seller can not sell to anyone else at this time, and the buyer will only not proceed if one or more of their conditions are not met.  If the purchaser is not satisfied that their conditions have met, they will choose NOT to remove their conditions, and thus terminate the contract, have their deposit returned and allow the property to go back on the market.  If the purchaser is satisfied that their conditions have been met, they will choose to remove their conditions and officially complete the sale of the home.

A condition can be anything you want it to be (sellers can theoretically put conditions on as well).  The most standard conditions are:

1) property home inspection – the buyer to have a certified inspector to examine the property at the cost of the buyer.

2) finance condition – the purchase of the home to be approved by the lender in order to obtain a mortgage

3) condo document review – every condo in Alberta is a corporation, and thus must keep financial and property specific records.  The buyer has a chance to review these and ensure they are acceptable to them before proceeding.

These are the most common conditions, however like I mentioned before a buyer can put forth whatever condition they want to have the seller accept.  For example – purchase is conditional to review of the property by purchasers father (when a parent isnt able to attend an intial showing), or purchase is conditional to the buyer receiving and signing official job transfer papers (when the buyer is still waiting on confirmation they will be relocated to a new city).

Typically conditions run anywhere from 5-10 business days, although quite often 5 business days should be more than sufficient to complete everything, provided you have already been preapproved.

Every time an offer on a home occurs in the province of Alberta, it only becomes legally binding once some sort of financial consideration has been made- ie. a deposit.

As discussed in the previous post, part of making an offer is giving a deposit.  This deposit can be anywhere from 1 dollar to the full purchase price.  However, a common deposit may be somewhere around $2500-$10000 on a house under 500,000 to $20,000-$50,000 for a home over $500,000.  These amounts will vary and are all part of the negotiating process when presenting an offer.

The way the deposit works is this – once an offer is accepted, the deposit is given by the buyer and held in trust by the sellers real estate company.  Now most likely your offer would have conditions on it.  If everything is fine and you are able to remove conditions, your deposit is forwarded directly to the sellers lawyer who will then hold in trust until possession.  This deposit counts toward whatever downpayment you will putting on the house.

If for some reason, you can not remove conditions, the deposit will be returned to the seller in full.  NOTE:  As long as you are abiding by the terms of the legally binding contract, the deposit will be returned.  If, for example, you have only a financing condition on the property, but as you were waiting to go through with the deal, another WAY better house that you prefer comes on the market so you decide not to remove your finance condition and buy the other one instead, the seller has a strong case to hold your deposit.  In this case you are able to meet the conditions (able to receive financing on the property) but choose not to proceed for other reasons, so you are in fact breaking the terms of the contract.

The deposit is designed to protect the rights of the seller, as well as demonstrate the willingness of a buyer to proceed with a purchase.  99 out of 100 times things go as planned, but as both a buyer and a seller, it is in your best interest to know all scenarios that may affect you should something go awry.