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. Buyer's Market

    A situation in which supply exceeds demand, giving purchasers ...
  2. Purchase-Money Mortgage

    A mortgage issued to the borrower by the seller of the home as ...
  3. Simultaneous Closing - SIMO

    A real estate financing strategy in which two simultaneous transactions ...
  4. Condition Precedent

    A legal term describing a condition or event that must come to ...
  5. Settlement Agent

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

    1. When one party expresses interest to buy or sell an asset ...
Related Articles
  1. Investing

    The Ins And Outs Of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  2. 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.
  3. 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.
  4. 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.
  5. Investing

    Rent-To-Own Real Estate Full Of Pitfalls

    Before you consider this type of arrangement, you should be aware of how it works, who benefits and the many things that can go wrong.
  6. Trading

    Rent To Own; Own To Rent

    This method can help first-time buyers afford a home using a rent-to-own strategy, and it can also be good for investors.
  7. 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.
  8. Investing

    Housing Deals That Fall Through

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

    Contingency Clauses In Home Purchases Contracts

    Real estate contracts often contain contingency clauses, which are conditions or actions that must be met for a contract to be binding.
  10. Investing

    How To Make Money WIth Real Estate Options

    Buying real estate options is one way to invest in real estate at a lower entry cost.
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's the difference between a letter of credit and a bank guarantee?

    Learn how letters of credit and bank guarantees differ, how they are used by banks and companies, and how buyers apply to ... 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 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 >>
  6. How is it possible to trade on a stock you don't own, as is done in short selling?

    Understand how the process of short selling allows a person to sell a stock he or she doesn't technically own by borrowing ... Read Answer >>
Hot Definitions
  1. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  2. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  3. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  4. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  5. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  6. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
Trading Center