Toronto Real Estate ~ Unconditional Offer

In Today’s globe and mail real estate section, it reminds us to be extremely careful when we are going into a bidding war. An Unconditional offer will help you win the house, but if you are not financially secure. You will put yourself in a serious financial jeopardy.

In other words, if you are in a bidding war on a $750,000 house, and you win with a $850,000 dollar unconditional offer, but the bank later decides the house is only worth $750,000, you are on the hook for that extra $100,000 in cash.

What if the buyers don’t get the money to close the deal, the buyers will lose the deposit and follow by a lawsuit.

A clean offer most likely will have the home inspection condition waived as well. What’s hidden behind the walls and in the ground can also affect buyer’s ability to close the deal with the bank. Every mortgage is subject to fire insurance, and if the building contains old-fashioned know and tube wiring, you may not be able to get that insurance, or a mortgage, until the electrical is updated.

Not being able to secure financing is just one of the potential risks of going in unconditionally.

So who can actually afford to present an unconditional offer. The answer is the buyers who can write a cheque to pay full purchase price. Remember, don’t let the bidding war to cloud you head! Think Clearly before registering an offer.