Can You Make an Offer on a Sold Conditional Property in Ontario?

You find the right home and the listing says 'sold conditional'. It is natural to wonder whether the door is closed, or whether you can still put in an offer in case the first deal falls through.

This article explains in general terms what the label means, what Ontario's real estate regulator says about how offers are handled, and what you can do to protect yourself. The answer for any one property depends on the signed documents, so a real estate lawyer should confirm your position before you commit.

What 'sold conditional' generally means

How a 'sold conditional' status applies to a particular property depends on the signed documents, so it is worth confirming with a lawyer. Offers commonly list the names, price, inclusions, deposit, possession date, expiry date and conditions such as inspection and financing.

What happens if a condition is not met, or whether the seller can accept another offer in the meantime, depends on the wording of the signed agreement. A general rule that fits every case is not safe to rely on, so have a lawyer read the actual documents.

Can you still submit an offer?

Often a buyer can ask, but whether the seller will consider an offer, and on what terms, comes down to the seller's instructions and the existing agreement. Your agent can ask the listing brokerage what the seller is willing to consider.

Some points about how offers are handled are set out by the Real Estate Council of Ontario (RECO). The default duty of a seller's agent is to convey offers as soon as possible unless the seller directs otherwise in writing. A seller's agent may hold offers to a set date and time only with the seller's specific written direction, and a general signed statement is not enough.

If you submit what is effectively a back-up offer, make sure it is written so that you understand exactly when it would take effect and what conditions it contains. How this applies depends on your situation, so ask a lawyer to review it before you sign.

How sellers must handle changes and early offers

People who have shown interest include those who booked a showing, viewed the property, said they would offer, or submitted an offer. If you are in that group and the process changes, you should hear about it in writing. If you did not, mention it to your agent.

Protect yourself with your own conditions

Whatever the status of the listing, your offer should protect you. Common conditions cover inspection and financing.

• Financing: a pre-approval is an estimate of the maximum mortgage and likely rate. It does not guarantee approval. You still need final lender approval during the conditional period.
• Lender checks: before final approval, the lender verifies the property meets its standards, and may offer a smaller mortgage, a higher rate, a larger down payment requirement or ask for a co-signer.
• Condo purchases: make a satisfactory status (estoppel) certificate a condition of the offer. The corporation must provide it within 10 days of the request and fee, may charge up to $100 including taxes, and anyone can request one.
• Status certificate contents can include by-laws, the budget, financial statements, the latest reserve fund study, arrears, special assessments and any litigation, so read it carefully.
• Title insurance is not required in Ontario and does not replace legal advice. Your lawyer should explain searches they will not perform, such as zoning, encroachments and survey issues, if you choose it.

What to do next

• Ask your agent to contact the listing brokerage and find out, in writing, whether and how the seller will consider other offers.
• Have a real estate lawyer review your offer before you sign, especially if it is a back-up or competing offer.
• Confirm your financing and keep your pre-approval details handy, remembering it is not a guarantee.
• Decide which conditions you need, such as inspection, financing and, for a condo, the status certificate.
• Set a deadline you are comfortable with, and be ready to move on if the seller will not engage.
• If the offer presentation process changes, make sure you receive that change in writing.

Once you have an accepted offer, your lawyer will handle the closing steps, including the statement of adjustments, which credits the vendor with the price and the purchaser with deposits.

Frequently asked questions