Conditions, Waivers & Bully Offers in Ontario Real Estate

In Ontario real estate, the difference between a conditional offer and a firm offer is one of the most consequential decisions a buyer makes — and it's often made under time pressure, in a multiple-offer situation, without a lawyer in the room yet. This page walks through what conditions protect, what waiving one legally means, what a "bully offer" actually is, and the risk profile of going firm without any of that protection in place.

What a Condition Is (and Why It Exists)

A condition (also called a "conditional clause" or "subject clause") is a term written into your Agreement of Purchase and Sale that makes the deal binding only if — or until — a specified event happens within a set timeframe. Until that condition is waived or fulfilled, the party it protects can walk away without penalty if the condition isn't met. Once every condition has been dealt with, the agreement becomes firm, and both sides are bound to complete the transaction.

Conditions exist to give you — the buyer, most commonly — a structured window to verify things you can't confirm before you sign: whether a lender will actually fund the purchase, whether the home passes an inspection, or, for a condo, whether the corporation's finances hold up. When a condition in your favour goes unsatisfied and you exit properly and on time, you recover your deposit in full.

The Conditions Buyers Most Commonly Use

Most residential offers in Ontario include one or more of the following:

• Financing condition — gives you a negotiated window, commonly in the five-to-ten-business-day range, to secure a mortgage commitment on the specific property, not just a pre-approval.
• Home inspection condition — gives you the right to hire a licensed inspector and, depending on how the clause is worded, to walk away if you're not satisfied with what they find.
• Status certificate condition (condos only) — gives you and your lawyer a short window after receiving the certificate to review the corporation's finances, reserve fund, and rules before you're bound. See our status certificate guide for what that review actually covers.
• Sale of your existing home — makes your purchase conditional on selling your current property first, protecting you from carrying two mortgages at once.

A pre-approval is not the same as confirmed financing — it's a lender's conditional estimate based on your income and credit at a point in time, not a commitment tied to the actual property. Ontario courts have also held that a buyer relying on a financing condition must make genuine, reasonable efforts to obtain financing; the condition protects against a real financing failure, not simply a change of heart.

What Waiving a Condition Actually Means

Once a condition period is running, it has to be resolved one of two ways: fulfillment (the condition was actually met — you got your mortgage commitment, the inspection came back clean) or waiver (you give up the right to rely on the condition, even if it was never technically satisfied). Only the party who benefits from a condition can waive it — a seller can't waive a buyer's financing condition, for instance — and both fulfillment and waiver need to be communicated in writing and delivered before the deadline.

The moment the last condition is waived or fulfilled, the agreement becomes firm and binding, whether or not the underlying protection was ever actually confirmed. If you waive a financing condition without a confirmed mortgage commitment and your lender later declines, you're still legally obligated to close.

Bully Offers, Explained

A bully offer isn't a distinct legal instrument — it's a firm, unconditional offer submitted to a seller before their stated offer date, timed to force a decision before other buyers get the chance to bid. Sellers favour firm offers because they close more reliably: a seller holding a conditional offer is exposed if financing falls through or a buyer walks after an inspection, so a well-timed firm offer with no conditions can win even when it isn't the highest number eventually on the table.

What makes a bully offer risky isn't anything special about the "bully" label — it's that it compresses your due diligence into whatever time you have before submitting, rather than a negotiated condition period after acceptance. A related but distinct mechanism some agreements use is an escape clause (sometimes called a "48-hour clause"): it lets a seller keep marketing the property during another buyer's condition period and, if a better offer arrives, gives that original buyer a short window to waive their condition or lose the deal. A bully offer achieves a similar competitive effect from the buyer's side, simply by never including the condition in the first place.

The Legal Risk Profile of Going Firm

Once you're firm — whether you got there by waiving conditions or by submitting a bully offer with none to begin with — you're bound by the same rules as any other buyer under a binding Agreement of Purchase and Sale. If you fail to close, that's a breach, and the seller can typically keep your deposit and sue for additional damages that flow from the breach: carrying costs, re-listing costs, and the gap between your agreed price and what the property eventually resells for. A court can, in some circumstances, also order specific performance against a defaulting seller, and comparable remedies can run against a buyer who cannot complete.

There is no general cooling-off period for resale homes or resale condo units in Ontario — a statutory rescission right exists for new pre-construction condominium purchases, but it doesn't extend to a resale deal you've already gone firm on. "Buyer's remorse" after going firm doesn't undo the contract; if you simply change your mind, you're still exposed to deposit forfeiture and a damages claim.

Courts have also scrutinized buyers who invoke a condition not because it genuinely failed, but to escape a deal they no longer want — if a seller can show the condition was exercised in bad faith, the deposit may still be at risk even where a condition existed on paper. Both routes to a firm deal, then, put weight on the same thing: whether what you agreed to actually reflects the protection you meant to have.

How a Lawyer Helps Before You Sign

There's no legal requirement that a lawyer review your Agreement of Purchase and Sale before you sign it — but once it's firm, your lawyer can't rewrite it, only advise you on what you've already agreed to. Reviewing the specific condition wording, the deadlines, and what waiving each one actually exposes you to is far more useful before you submit or waive anything than after. If you're weighing a bully offer or considering dropping a condition to compete, a licensed Ontario real estate lawyer can walk through what you'd specifically be giving up on your deal — not a generic one.

Go Deeper

This page covers the legal-risk side of conditions and offers. For the money side of the same transaction, see our closing costs breakdown and our deposit rules guide — deposits are the dollars actually at risk when a condition is waived and a deal later falls through. For the full scope of what our real estate lawyers handle, start on our real estate services page, or see our published pricing for what a purchase file costs, flat and HST included.

Frequently asked questions