How Often Do Conditional Sales Fall Through in Greater Vancouver?

In Greater Vancouver’s dynamic real estate market, conditional sales—where buyers’ offers depend on certain criteria like financing, inspections, or the sale of another property—are common.

However, these deals don’t always reach completion. Understanding the frequency and reasons behind conditional sales falling through can help both buyers and sellers navigate the market more effectively.

General Statistics on Conditional Sales Falling Through

Nationally, data from the National Association of Realtors (NAR) indicates that approximately 5% of pending home sales fall through. This suggests that about 95% of such deals successfully close.

In Canada, particularly in British Columbia, the rate of conditional sales falling through can vary based on several factors, including market conditions, the type of property, and the specific contingencies involved.

Factors Contributing to Conditional Sales Falling Through

Several common reasons can cause conditional sales to collapse:

• Financing Issues: Buyers may fail to secure mortgage approval, leading to the deal falling through.
• Home Inspection Findings: Unforeseen problems discovered during inspections can prompt buyers to withdraw.
• Appraisal Problems: If the property’s appraised value is lower than the agreed purchase price, financing may be affected.
• Sale of Another Property: Conditional offers contingent on the sale of the buyer’s current home can fall through if that sale doesn’t proceed as planned.
• Market Fluctuations: Sudden changes in the market can influence a buyer’s decision to proceed with the purchase.

City-Specific Insights in Greater Vancouver

While specific statistics for each municipality within Greater Vancouver are not readily available, understanding the local market dynamics can provide context:

• Vancouver: As the central hub, Vancouver often sees a higher volume of transactions, which may lead to a higher number of conditional sales. However, the competitive nature of the market can also result in more deals falling through due to unmet conditions.
• Burnaby: With its proximity to Vancouver, Burnaby experiences a robust real estate market. Conditional sales here may be influenced by similar factors affecting Vancouver.
• Richmond: The Richmond market is characterized by a mix of detached homes and condominiums. Conditional sales in this area can be impacted by factors like financing issues and inspection results.
• Surrey: As one of the fastest-growing municipalities, Surrey’s real estate market is dynamic. Conditional sales may be affected by the rapid pace of development and varying buyer profiles.
• Langley: Known for its suburban appeal, Langley’s market sees a mix of first-time buyers and downsizers. Conditional sales can be influenced by factors like the sale of existing homes and financing.

Strategies to Minimize the Risk of Conditional Sales Falling Through

For buyers:

• Secure Pre-Approval: Obtain mortgage pre-approval to strengthen your position.
• Conduct Thorough Inspections: Address potential issues early through comprehensive inspections.
• Understand Market Conditions: Stay informed about local market trends to make timely decisions.

For sellers:

• Evaluate Offers Carefully: Consider the strength of buyers’ conditions and their ability to meet them.
• Maintain Property Condition: Ensure the property is in optimal condition to minimize inspection-related issues.
• Be Flexible with Conditions: Where possible, accommodate reasonable buyer conditions to facilitate smoother transactions.

Conclusion

While conditional sales are a common aspect of Greater Vancouver’s real estate market, understanding the factors that contribute to deals falling through can help both buyers and sellers navigate the process more effectively. By staying informed and prepared, parties involved can increase the likelihood of successful transactions.

For more information on property ownership and related topics, visit our Renting vs Buying in Vancouver: Which Is Better? and Home Cost Calculator pages.