Conditions in an Agreement of Purchase and Sale are clauses that give you the right to exit the deal under specific circumstances within a set timeframe. Each condition you include reduces your offer's attractiveness to the seller; each one you waive reduces your protection as a buyer. Understanding what each condition does helps you make an informed decision about which to include.
Financing condition
The most important condition for most buyers. It gives you a set number of business days — typically 5–10 — to confirm that a lender will advance the mortgage on this specific property at the terms you need. Even with a pre-approval, the lender still has to approve the specific property: they'll order an appraisal, review the building's status (for condos), and confirm the property meets their lending criteria.
What it protects: if your lender declines the mortgage on this property — because the appraisal comes in low, because the building has lender issues, or because your financial situation changed — you can walk away with your deposit returned.
When buyers waive it: when their pre-approval is strong and solid, the property is a standard type, and market conditions require a firm offer to compete. High risk — if you firm up and financing falls through, you could forfeit your deposit and face legal exposure.
Home inspection condition
Gives you a set number of business days (typically 3–5) to conduct a home inspection by a qualified inspector and review the report. If the inspection reveals issues you're unwilling to accept, you can walk away.
What it protects: unknown defects that aren't visible during a showing — aging mechanicals, water intrusion evidence, structural concerns, hazardous materials. Without this condition, you accept the property in its current state.
When buyers waive it: in competitive situations. To maintain some protection, arrange a pre-offer inspection — walk through the property with your inspector before submitting. Some sellers permit this; some don't. It gives you information without requiring a formal condition, allowing you to make a firm offer with at least partial knowledge of the property's state.
Status certificate review (condos only)
Required for any condominium purchase. The status certificate is a package of documents disclosing the condo corporation's financial health: reserve fund balance, operating budget, any pending special assessments, management agreements, insurance, and the rules and bylaws of the corporation. Your lawyer reviews it — not you — within the condition period (typically 3 business days after receipt).
What it protects: hidden financial problems at the condo corporation level — a reserve fund in deficit, a pending $25,000 special assessment per unit, litigation against the board. These are problems you'd inherit as the new owner.
This condition should never be waived. The status certificate review is cheap (included in your legal fees) and the downside of skipping it can be severe.
Sale of existing property condition
Allows you to back out if you can't sell your current home within a specified period. This protects you from owning two properties simultaneously. Sellers in competitive markets typically don't accept this condition, or accept it only with a 24–48 hour clause (if the seller receives another offer, you have 24–48 hours to either firm up or release the seller).
Insurance condition
Confirms you can obtain home insurance at a reasonable cost. Worth including for properties with older electrical systems (knob-and-tube, Federal Pacific panels), oil tanks (active or decommissioned), or a history of claims. Insurers may refuse to cover or charge significantly more for properties with these characteristics.
How long should conditions run?
Financing: 5 business days is standard; 10 is more comfortable. Home inspection: 3–5 business days. Status certificate: 3 business days after receipt (the seller has up to 10 days to provide it, so factor that in). Shorter condition windows signal confidence; longer ones give you more time but make your offer less attractive.