What is a firm offer?
A firm offer is an offer where the buyer is entirely sure of his or her choice and is ready to purchase the property. The finances are sorted and there are no circumstances to be followed. There is also no need for a home inspection by the purchaser.
Advantages of a firm offer
There are several advantages to putting up a firm offer. The deal gets done quickly as there are no requisites to be done. The buyer puts in the offer and the seller accepts, keeping it hassle-free.
The seller may accept lower offers where there is a competitive Market for some condos. Giving a firm offer seals the deal and ensures that you would get the property as quickly as possible.
The costs are minimized. Only the property cost is paid and no added expenses such as inspections, etc. are not paid.
What is a conditional offer?
A conditional offer is a contract between the buyer and seller that has specific conditions attached to it. This offer is usually used to protect the buyer so that he or she gets all of the requirements fulfilled from the property one is purchasing. This is the most often used type for transactions of real estate.
Types of conditional offers
There are multiple types of conditions, which buyers put forth in conditional offers. Some buyers tend to present the requirement that they would be able to buy the new property when their old or existing house or any other asset sells and they have cash from it. The cash acquired from the selling of assets can later be used to settle this condition from the offer.
Another common condition asked by buyers of houses is usually home inspections. Home inspections provide a check to the property the purchaser is getting. The home inspectors scrutinize the property to find any damages or hazards which can affect the offer put on the property. If something is found out, a lower price can be offered by the buyer, or maybe, the buyer can request to repair those damages found during the inspection. If the damages analyzed in the inspection are dangerous or may turn out more menacing in the future, this may be used to eventually call off the deal.
The condition may ask for rebuilding or renovation permits from the government. Some properties might be reshaped in a way for some business activity or any other use, for that some renovations such as expanding the footprint of the premises, etc. might take place. Changes like these to property require a permit from the local government so the action be taken place lawfully.
These were some common conditions put forth by buyers. There are others too such as arranging mortgages, status certificates, etc.
What happens after the conditions are met?
Once the required conditions are met or fulfilled whether it was getting a home inspection or arranging finance, the offer becomes firm, in case of no further circumstances. If for example, during the house inspection, the damage was found, the offer might be renegotiated but eventually would become firm if the buyer is willing to purchase the property. In any case, if the buyer wants to purchase the property, the conditional offer, after all, conditions are met, becomes a firm offer.
Also Read: If you are a Buyer, must check: Steps To Follow While Buying A Condo