Conditional offer조건부 오퍼

What is it?

A conditional offer says “I will buy if these conditions are met.” When the seller signs, there is a contract, but if a condition is not fulfilled (or waived) by its deadline, the clause normally says the deal ends and the deposit is returned.

An offer with no conditions is called a firm offer. Conditions are safety nets for the buyer, but to a seller they make the deal “breakable”, so in a competition an offer with fewer conditions looks more attractive.

RECO (the Real Estate Council of Ontario) advises making your offer conditional, if possible, on the things that matter to you, such as financing, a home inspection and the sale of your existing home.

Common conditions

Other conditions, such as a survey, a septic or well test, or a zoning check, are added when the property calls for them. Decide which conditions you need with your agent and lawyer.

How is a condition worded?

Conditions usually go in Schedule A of the agreement. A condition typically states four things: (1) what it depends on, (2) the deadline, (3) that if no written notice is given by the deadline the agreement is void and the deposit is returned in full, and (4) whose benefit the condition is for and that this person may waive it.

A condition “for the sole benefit of the buyer” can be waived by the buyer alone. For example, if the inspection report is not perfect but you are fine with it, you waive the condition in writing and the deal continues.

A condition that benefits both sides, or that depends on a third party’s decision (such as a city approval), cannot be waived by one side alone. Lawyers call this a “true condition precedent”. If you are not sure which kind yours is, ask a lawyer.

How are deadlines set?

Each condition has its own deadline. No law sets it; it is negotiated. Whether it says “business days” or “days”, and whether it counts from the day the deal was accepted, changes the real deadline, so read the wording closely.

Every deadline in the agreement must be met exactly. If you miss it, the deal is treated as the condition clause says. Most clauses say the agreement is void if no notice of fulfilment or waiver is given in time, but some are written the other way (no notice means the condition is deemed satisfied), so check which one you have.

If you need more time, both sides must agree to an extension in writing before the deadline passes. The seller can refuse.

How to fulfil or waive a condition

1. Do what the condition needs: send your documents to the lender and get the approval, book the inspection and get the report, or have your lawyer review the status certificate.
2. If you are satisfied, sign a written “notice of fulfillment” or “waiver” before the deadline. Your agent prepares the form.
3. Your agent delivers the signed document to the seller’s side (usually the seller’s agent). The law requires an agent who receives a written waiver to convey it to their own client as soon as possible, just like an offer. Keep a record of the delivery time.
4. When every condition is fulfilled or waived, the deal is firm. From then on you cannot simply walk away.
5. If you are not satisfied, you either do nothing (depending on the clause) or send written notice that the deal has ended, and start the deposit return process (a mutual release).

What if a condition is not met?

The deal ends as the clause says and the deposit is returned. Because the deposit sits in the brokerage’s trust account, a mutual release signed by both sides is usually needed before the money is paid out. If the seller refuses to sign, the brokerage cannot release it and a court order may be needed. RECO’s deposit insurance does not cover this kind of dispute.

Using a condition as an excuse to walk away is risky. A financing condition is for a buyer who honestly tried to get the mortgage, not for someone who simply changed their mind. If there is a dispute, you will need a lawyer.

Pressure to drop conditions in a competition

When there are several offers, it is tempting to drop conditions. RECO warns that pre-qualifying for a mortgage (getting a rough estimate of how much you could borrow) does not safely remove the need for a financing condition, and that skipping a home inspection is a significant risk a buyer must weigh carefully. A pre-approval is not final approval either. FSRA (Ontario’s financial regulator) says a lender may decide not to lend after it looks closely at you or the property.

There are things you can do before dropping a condition: have the home inspected before you offer (a pre-inspection), give the lender the address in advance, or, for a condo, review the seller’s status certificate with your lawyer before the offer. See “Firm offer” for more.

Seller conditions and escape clauses

Sellers can add conditions too. For example, a seller may make the sale conditional on the deal for their next home becoming firm.

When a buyer adds a “sale of my current home” condition, the seller usually adds an escape clause that lets them keep the home on the market and accept other offers. If another acceptable offer arrives, the seller notifies the buyer, who then has a short time set in the contract to waive the condition and go firm, or let the deal end. People often call it a “72-hour clause”, but the actual time is whatever the contract says.

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