Conditional Offer

AAA

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.

INVESTOPEDIA EXPLAINS '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. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Closing

    The end of a trading session. The closing of a trading day halts ...
  4. Earnest Money

    A deposit made to a seller showing the buyer's good faith in ...
  5. Escrow

    A financial instrument held by a third party on behalf of the ...
  6. Commercial Real Estate Loan

    definition of a commercial real estate loan
RELATED FAQS
  1. Why does the loan-to-value ratio matter?

    For mortgage lenders and borrowers, the loan-to-value ratio is an important factor in determining the repayment terms of ... Read Full Answer >>
  2. What is the difference between a PMI (primary mortgage insurance) loan and a Federal ...

    Home buyers who are unable to contribute a traditional down payment of 20% may think home ownership is out of reach. However, ... Read Full Answer >>
  3. Why would a homebuyer need to take out PMI (private mortgage insurance)?

    Most conventional mortgage lenders carry strict requirements for home buyers, including credit history and score minimums, ... Read Full Answer >>
  4. Does the bank set up an escrow account for the buyer and seller in a home sale?

    An escrow service, rather than a bank, typically sets up an escrow account for the buyer and seller in the sale of a home. ... Read Full Answer >>
  5. Who manages an escrow account?

    An escrow account is managed by an outside party in order to hold valuables, such as money, property deeds and personal finance ... Read Full Answer >>
  6. What are the pros and cons of a simple-interest mortgage?

    The basic disadvantage of a simple interest mortgage lies in the fact that unless the borrower conscientiously makes all ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    4 Steps To Attaining A Mortgage

    It starts with knowing your choices as well as your price range. We show you how to get there.
  2. Home & Auto

    Do You Need A Home Inspection?

    This step is important when purchasing a property because it may save you thousands.
  3. Credit & Loans

    Mortgages: Fixed-Rate Versus Adjustable-Rate

    Both of these have advantages and disadvantages depending on your financial needs and prospects.
  4. Credit & Loans

    Mortgage Points: What's The Point?

    Learn how to pay less for your home in the long run, or save in the short run.
  5. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  6. Budgeting

    Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.
  7. Budgeting

    The Hidden Costs Of Home Ownership

    Mortgage lenders don't factor the extra costs into your loan amount. Make sure you save for the "little" things.
  8. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  9. Home & Auto

    Add Extra Appeal, and Market Value, To Your Yard

    Spring landscaping projects are worthwhile because, in addition to bringing more appeal to your yard, they'll increase the resale value of your home.
  10. Credit & Loans

    Can You Get A Mortgage On A Mobile Home?

    You can get a loan for a mobile home, but it may not be a mortgage. These are the choices for funding manufactured housing.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center