Conditional offer

In a hot real estate market, conditional offers go by the wayside, but they can be an important part of a real estate transaction if you want certain things done before the sale is finalized. In a conditional offer for a house, you might state that it must pass an inspection to your satisfaction, or specify what things have to be fixed, or declare that the sale is contingent on you qualifying for a mortgage or selling your current home. Or perhaps you have big plans to build an addition or run a business from the house that will require a permit from the town. Your conditional offer might state that the sale is contingent upon being approved for these permits.

Another mishap that could derail any offer is if the bank does not agree with the value of the house, so they decline to approve the mortgage. But once all conditions are met, you'll be obligated to buy the property. A certain timeframe will be set for the conditional offer to be in effect, as the sellers will want to find another buyer if you back out.