With the heating Toronto real estate market, Subject Free Offers are more and more common in Multiple Offer Situations. The downside is that without full preparation and professional advice, mishandled Subject Free offers can quickly result in lawyers getting involved making it expensive and painful for all parties.
What is a Subject Free Offer?
A Subject Free Offer, aka Non Conditional Offer, is an offer prepared by the buyer that does not allow the buyer to walk away for any reason if the seller accepts.
If the buyer cannot get a mortgage on the property, too bad the buyer must complete the deal.
If the property turns out to be a leaky condo or contains asbestos too bad the buyer must complete the deal.
Why Use Subject Free Offers?
Competition! In a highly competitive Multiple Offer Situation presenting a Subject Free Offer makes a buyer's offer much more attractive to a seller. Subject Free Offers are a sure thing, the Buyer cannot walk away. Offers with Subjects on them often take 3-7 days to become firm.
How to Safely Use Subject Free Offers!
1) Hire a qualified agent to help you with your due diligence and to prepare the offer for you.
2) Do you homework! Make sure you get something in writing from your bank or lender confirming you can get financing on the property you want to submit a Subject Free offer. Make sure you get your home inspection done before you submit your offer. Make sure you have gone over all the documentation associated with the property and your lawyer and your agent have answered all your questions, so that everything is 100% crystal clear to you!
3) When in doubt DO NOT submit a Subject Free Offer. Remember! You can’t back out!
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