June 17, 2025
In Ontario’s competitive real estate market, it’s become increasingly common for buyers to submit offers with no conditions in an effort to stand out. While a “clean offer” may appeal to sellers and increase the chance of acceptance, it can expose buyers—and sometimes sellers—to significant legal and financial risks.
We have written recently about the risks of an unconditional offer to purchase, but this topic is so timely and important that we offer this article, which looks at the issues involved from a different angle- what if you have a conditional offer accepted but then are asked to “waive conditions” before you have completed your due diligence?
Even if you read our earlier piece, we think this is a valuable read for you.
Why Are Buyers Waiving Conditions?
In multiple-offer scenarios (often called bidding wars), buyers may feel pressure to waive conditions to compete with other offers. Sellers typically prefer condition-free offers because they are firm and create more certainty. Sometimes, a conditional offer leads to pressure to remove, or waive, the conditions, such as when the seller receives a competing offer
What Are Conditions in a Real Estate Offer?
Conditions are clauses in an Agreement of Purchase and Sale (APS) that make the agreement conditional on certain events happening within a set period of time. Common conditions include:
- Financing: Buyer’s ability to obtain a mortgage.
- Home Inspection: Buyer’s satisfaction with the condition of the property.
- Sale of Buyer’s Property: Buyer must sell their current home first.
- Status Certificate Review (for condos): Buyer’s lawyer must approve the condo’s status certificate.
When these conditions are met, the buyer will “waive” or “fulfill” the condition in writing, making the deal firm. If the condition isn’t satisfied, the buyer may back out without penalty.
. But waiving conditions comes with serious risks:
- Risk of Losing Your Deposit
In Ontario, the standard deposit (often 5% of the purchase price) is held in trust. If you submit a firm offer with no conditions and later discover you can’t get financing or the property has major defects, you cannot simply walk away.
If you don’t close, you risk:
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- Losing your entire deposit, and
- Being sued for damages (e.g., if the seller has to re-list and sells for less)
Case law in Ontario supports sellers keeping the deposit when a buyer fails to close, even if the seller quickly resells the property.
- Financing Isn’t Guaranteed Without a Condition
Buyers often assume that a pre-approval means financing is locked in. It’s not.
Lenders may:
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- Reassess your finances after reviewing the property,
- Decline to finance if the appraisal comes in below the purchase price, or
- Pull the offer if your financial circumstances change.
Without a financing condition, you’re on the hook for the full purchase price—even if your lender backs out.
- Hidden Defects Can Be Costly
Skipping a home inspection could mean missing:
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- Structural issues,
- Mold or asbestos,
- Plumbing or electrical problems, or
- Signs of water damage.
These repairs can cost tens of thousands of dollars. And in most cases, you won’t be able to recover those costs from the seller unless there’s fraud or deliberate concealment.
- Condos Come with Their Own Risks
For condo purchases, the status certificate provides essential information:
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- Reserve fund status,
- Upcoming major repairs or special assessments,
- Rules and restrictions (e.g., on pets or rentals),
- Litigation involving the condo corporation.
Waiving this review could saddle you with unexpected monthly fee increases or special levies shortly after moving in.
- Legal Complications if You Try to Back Out
In Ontario, once an offer is firm, the agreement is legally binding. Courts enforce these contracts strictly. If you attempt to walk away:
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- You may face a lawsuit for breach of contract,
- The seller can sue for losses,
- You may also be liable for their legal fees.
Even claiming you made a mistake or were pressured likely won’t hold up.
What Can You Do Instead?
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- Shorten the condition period: Sellers may accept a 2-3 day financing or inspection condition.
- Do a pre-offer inspection: The seller sometimes allows this.
- Work with a lawyer: Especially for reviewing condo status certificates or adding protective language.
- Have a backup lender: In case your primary lender pulls out.
- Know your financial limits: Don’t offer more than what your budget and lender can support.
Takeaways
- Real estate is likely the biggest purchase of your life.
- Waiving conditions might help you win the bidding war—but at what cost?
- Removing key protections can turn a dream home into a financial nightmare.
- A firm deal is just that—firm—and once you’re locked in, there’s often no easy way out.
- Before submitting a condition-free offer, speak with your realtor, mortgage broker, and real estate lawyer to fully understand the risks and alternatives.
WHAT WEILERS LLP CAN DO TO HELP YOU
If you are uncertain about the terms of your agreement of purchase and sale, our real estate lawyers would be happy to explain them to you. All that we ask is that you hire us to close the deal on your behalf if you go ahead.
If you are in the unfortunate position of not being able to close, our real estate lawyers will do their best to extract you from the deal at the lowest possible cost.
If you are sued, our litigation lawyers are here to help.
If you have any questions about your real estate deal, give us a call. We might be the right lawyers for you.