What is the difference between a conditional offer and a firm offer in Ontario?
A conditional offer contains one or more conditions that must be satisfied or waived before the deal becomes binding. Common conditions include financing approval, home inspection, and status certificate review. During the condition period, the buyer retains the right to exit the deal if a condition cannot be met, with the deposit returned.
A firm offer has no outstanding conditions — either none were included to begin with, or all conditions have been waived. A firm offer is fully binding on both parties. Neither the buyer nor the seller can walk away without legal consequences, and the deposit is at risk if the buyer fails to close.
Sellers generally prefer firm offers because they provide certainty. In competitive markets, buyers sometimes submit firm offers to win against conditional bids. However, a firm offer without a financing or inspection condition carries meaningful risk. You should only make a firm offer if you have done your due diligence — financing confirmed, property condition understood — and you are fully prepared to close.
Key takeaways
- A conditional offer allows the buyer to exit if conditions are not satisfied.
- A firm offer is fully binding on both parties with no exit rights for the buyer.
- Sellers prefer firm offers; buyers may use them to compete in hot markets.
- Only submit a firm offer if your financing is confirmed and the property's condition is acceptable.