- A conditional agreement is not final and binding until all its conditions are met or waived, so the seller may still consider other offers.
- If the first buyer waives or fulfils its conditions within the escape clause deadline, the seller must sell to that buyer on the original terms.
- A backup offer should be conditional on the first deal ending, so the seller is not bound to two buyers.
You have had an offer accepted, but it has conditions attached. Or you are the buyer who arrives second and wonders whether a house with an accepted offer is really off the market. Either way, the answer turns on whether the first deal is yet firm.
This article explains how a seller can look at other offers after accepting a conditional one, how an escape clause works, and what each buyer should know about backup offers, conditions and deposits.
Can a seller look at other offers after accepting a conditional one?
Generally, yes. A conditional agreement is not final and binding until all of its conditions are met or waived, so a seller who has accepted a conditional offer may still consider other offers. Once every condition is waived, the agreement is firm and binding.
That does not mean the seller can simply walk away from the first buyer. The seller needs a way to deal with the first deal fairly, and that is the job of an escape clause.
How an escape clause works
The seller protects itself with an escape clause. It requires the seller to give notice to the first buyer and gives that buyer a set time, for example 48 hours, to waive or satisfy its conditions.
- If the first buyer waives or fulfils its conditions within the deadline, the seller must sell to that first buyer on the original terms.
- If the first buyer does not, the first deal can end, depending on how the agreement is worded, and the seller is free to proceed with the other offer.
- The exact notice, timing and wording come from the signed agreement, so read it closely.
What a seller can do with any offer
When an offer is received, the seller may accept it, reject it, make a counter-offer, or ask the buyer to revise it. With competing offers, the seller may negotiate with one buyer while setting the others aside, and does not have to take the highest price.
A buyer who has made a written offer is entitled to know the number of competing offers, but not their amounts or conditions.
Advice for the first buyer and the backup buyer
| If you are... | Keep in mind |
|---|---|
| The first buyer | If you get an escape clause notice, the deadline is short, so know in advance whether you can waive or satisfy your conditions in time. Waiving or fulfilling them on time means the seller must sell to you on the original terms. |
| The backup buyer | Make your offer conditional on the first deal ending, so the seller does not end up selling to two buyers. You may learn how many competing offers exist, but not their terms. |
Conditions such as a satisfactory home inspection must be waived or performed by the agreed time and must be used in good faith. Depending on the wording, if a condition is not met the buyer may terminate or the contract may end automatically, with the deposit returned.
Deposits and what to do next
Paying the deposit late or withholding it can itself breach the agreement. The deposit is normally held by the brokerage in a real estate statutory trust account, and it can be released only with a mutual consent or release signed by all parties, or under a court order.
- Read the conditions and the escape clause wording before you sign or respond.
- Note every deadline, including the time to respond to a notice.
- Pay the deposit when the agreement says it is due.
- If you are a backup buyer, make sure your offer depends on the first deal ending.
- Do not sign a release of the deposit without understanding it.
- Talk to a real estate lawyer before you waive conditions or if a dispute is developing.
Frequently asked questions
Can a seller accept a second offer while a conditional offer is still open?
A seller may consider other offers because a conditional agreement is not final and binding until its conditions are met or waived. The seller usually uses an escape clause to give the first buyer a chance to proceed.
What happens if the first buyer waives its conditions in time?
The seller must sell to that first buyer on the original terms. A backup offer made conditional on the first deal ending would then fall away.
Does the seller have to accept the highest offer?
No. With competing offers, the seller may negotiate with one buyer while setting others aside, and does not have to take the highest price.
Who gets the deposit if the deal falls apart?
It depends on the agreement and the reason. If a condition is not met, the deposit may be returned, depending on the wording. If the parties disagree, the deposit can be released only by a release signed by all parties or by a court order.
Sources
- RECO – Consumer Deposit Insurance FAQ — reco.on.ca
- RECO – Ask Joe: accepted a conditional offer, can I still look at other offers? — reco.on.ca
- RECO – Dealing with competing offers — reco.on.ca
- RECO – Ask Joe: terms and conditions in a real estate offer — reco.on.ca
- RECO – Ask Joe: deposit held back pending inspection — reco.on.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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