A conditional offer is an Agreement of Purchase and Sale that contains one or more conditions — clauses that give the buyer (or in some cases the seller) the right to exit the deal if certain circumstances arise before a specified deadline.
How conditions work
When a conditional offer is accepted by both parties, the deal is "accepted" but not yet "firm." The buyer has the right — and the obligation — to fulfill or waive each condition by its expiry date and time.
During the conditional period, the buyer investigates whatever the condition covers: arranging financing, conducting a home inspection, having a lawyer review a status certificate. At the end of that period, the buyer makes one of two choices:
Waive the condition: Sign a document removing the condition from the agreement. This can happen before the deadline — you don't have to wait. Once waived, that condition no longer provides an exit.
Exercise the condition: Notify the seller that you're unable or unwilling to fulfill the condition and are walking away. The deposit is returned to the buyer in full.
The key word is "or" — once a condition expires without being waived, the agreement is typically void. Deadlines must be respected.
What a conditional period looks like in practice
You submit an offer with a 5-business-day financing condition and a 3-business-day home inspection condition. The seller accepts on a Monday. You immediately:
- Book the home inspector for Tuesday or Wednesday
- Send the accepted offer to your mortgage broker or lender
By Wednesday, your inspector provides the report. You review it, discuss findings with your agent, and decide to proceed. You sign a waiver removing the home inspection condition. By the following Monday, your lender confirms the mortgage commitment. You sign a second waiver removing the financing condition. The deal is now firm.
Alternatively: the home inspector finds significant structural issues. You exercise the home inspection condition, notify the seller's agent, and your deposit is returned.
The 24/48-hour clause (Escape Clause)
If you have a condition for sale of your existing property, sellers often insert a 24 or 48-hour notice clause. This means: if the seller receives another offer while you're in your conditional period, they can notify you and give you 24–48 hours to waive your sale-of-property condition and firm up — or release them to take the new offer.
This clause allows sellers to continue marketing the property while giving you a conditional offer some priority. It's a compromise between seller protection and buyer flexibility.
Can a seller accept another offer during your conditional period?
Not unless your agreement includes the 24/48-hour clause. A standard conditional offer, once accepted, legally binds both parties for the duration of the condition period. The seller cannot accept another offer during that period without your agreement to void the existing one — absent an escape clause.
Conditional vs. firm: the practical difference
A conditional offer gives both parties some uncertainty. The seller can't commit to their next purchase until the conditions are waived; the buyer hasn't fully committed yet either. A firm offer — conditions waived, both parties committed — is cleaner and often preferred by sellers, which is why reducing or eliminating conditions improves offer competitiveness.