Understanding Offer Conditions in Ontario: What Buyers & Sellers Need to Know

Understanding offer conditions is key to a smooth real estate transaction.

In Ontario’s fast-moving real estate market, the words “conditional offer” pop up in almost every transaction. But what does a conditional offer actually mean—and why are these conditions so important for both buyers and sellers? Let’s break down the essentials so you can move forward with confidence, whether you’re buying your dream home or selling to a new owner.

Financing Condition

This is one of the most common conditions in Ontario. It gives buyers a set period (usually 3–5 business days) to secure final mortgage approval. Even with pre-approval, lenders need to review the specific property and your finances before giving the green light. Without this condition, buyers risk losing their deposit if financing falls through.

Home Inspection Condition

The home inspection clause allows buyers time to have the property professionally inspected. Inspectors check for hidden issues like foundation cracks, roof leaks, or outdated wiring. If something major turns up, buyers can negotiate repairs, ask for a price reduction, or walk away entirely—no penalties attached.

Sale of Buyer’s Property Condition

This condition is a lifesaver for buyers who need to sell their current home before buying a new one. It gives them time to get their property sold, usually within a set number of days. If the sale doesn’t happen, the buyer can back out without losing their deposit.

Status Certificate Review (for Condos)

If you’re buying a condo, a status certificate review lets your lawyer check the building’s financial health, rules, and any upcoming repairs. It’s a crucial step that protects you from unexpected costs or restrictions down the road.

Waiving vs Fulfilling Conditions

Once all conditions are met, buyers “fulfill” or “waive” them in writing. Fulfilling means you’ve satisfied the condition (e.g., your financing is in place), while waiving means you’re choosing to proceed without it. Only after this step does the deal become firm and binding.

Tips for Buyers and Sellers

• Buyers: Never skip important conditions just to win a bidding war. Protect your interests, especially with financing and inspections.
• Sellers: Review all conditions carefully. Shorter timelines or pre-inspections can make your home more attractive to buyers.

Work closely with your real estate agent and lawyer to understand every clause before signing.

Understanding offer conditions is key to a smooth transaction in Ontario. Want help drafting or reviewing offer conditions? I’m here to guide you every step of the way.