DEFINITION of 'Conditional Offer'

In general, an agreement between a buyer and a seller that an offer will be made if a certain condition is met. In real estate transactions, conditions can include a home inspection or a mortgage application. Once the conditions are satisfied, the buyer or seller will then be obligated to purchase or sell the property. If the conditions are not met then the buyer or seller is not obligated to purchase or sell the property.

BREAKING DOWN 'Conditional Offer'

The time frame of a conditional offer is often short, since the seller will not want to tie up the property for an extended period of time. Some real estate agents will still show the property to other buyers in order to put pressure on the conditional offer buyer to hurry up, or will suggest that the seller insert an escape clause into the conditional offer in case a better offer comes along.


A conditional offer can also refer to an offer of employment that is contingent on meeting certain conditions. These could include passing a background check, medical clearance, visa clearance, reference checks and many others.

RELATED TERMS
  1. Purchase-Money Mortgage

    A mortgage issued to the borrower by the seller of the home as ...
  2. Settlement Agent

    1. The party involved in completing a transaction between a buyer ...
  3. Offer

    1. When one party expresses interest to buy or sell an asset ...
  4. Seller Financing

    A real estate agreement where financing provided by the seller ...
  5. Seller's Call

    An agreement between a buyer and a seller for a specific grade ...
  6. Owner Financing

    When a property buyer finances the purchase directly through ...
Related Articles
  1. Investing

    Contingency Clauses In Home Purchase Contracts

    Here, we introduce widely used contingency clauses in home purchase contracts and how they can benefit both Buyers and Sellers.
  2. Investing

    Home Sale Contingencies: What Buyers And Sellers Need to Know

    Home sale contingencies protect buyers who want to sell one home before purchasing another. Find out what buyers and sellers need to know about these contractual conditions.
  3. Investing

    Ins And Outs Of Seller-Financed Real Estate Deals

    Seller financing works like this: Instead of a buyer receiving a loan from a bank, the person selling the house lends the buyer the money for the purchase.
  4. Investing

    10 Tips for Getting a Fair Price on a Home

    When the housing market booms, it's tougher than ever to get a good price. Make sure the house you choose is worth the price you pay.
  5. Investing

    Housing Deals That Fall Through

    Find why buyers back out and what you can do if you're left holding the bag.
  6. Investing

    7 Must-Have Real Estate Contract Conditions

    It's a good idea to educate yourself on the not-so-obvious parts of a real estate contract.
  7. Investing

    5 Reasons Why You Still Need A Real Estate Agent

    Doing the work yourself can save money, but it could end up being more costly than a realtor’s commission in the long run.
  8. Investing

    7 Must-Have Real Estate Contract Conditions

    Buying a home can bury you in paperwork. But it’s worth your time to make sure your contract contains these seven important conditions.
  9. Investing

    5 Ways To Save On Real Estate Fees

    Even a 1% reduction in real estate commissions can save you thousands of dollars.
  10. Managing Wealth

    Rent-To-Own Homes: How The Process Works

    Here's what to watch for when negotiating a contract for a rent-to-own home – and who is a good candidate for this option.
RELATED FAQS
  1. What is an assumable mortgage?

    The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >>
  2. What are the differences between Ex Works (EXW) and Free On Board (FOB)?

    Learn about Ex Works and Free on Board, the main difference between these Incoterms, and the responsibilities of buyers and ... Read Answer >>
  3. What do people mean when they mention real estate gazunders or gazumps?

    A gazump refers to the practice of raising the real estate's price from what was already verbally agreed upon. This move ... Read Answer >>
  4. What are the benefits of an assumable mortgage?

    An assumable mortgage allows the purchaser of a property to assume the mortgage from the property's seller. The benefits ... Read Answer >>
  5. What Home-Buying Costs Can I Deduct from Taxes?

    Except for interest, points, real estate taxes and PMI, costs to acquire a home increase the asset’s tax basis and are not ... Read Answer >>
  6. What does the variance between the bid and ask price of a stock mean?

    Find out how stocks are traded in the market, why the bid and ask prices are different and why the bid-ask spread is smallest ... Read Answer >>
Hot Definitions
  1. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  4. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  5. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  6. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
Trading Center