Three offer conditions: when to include or drop financing, inspection and sale-of-property conditions

Should your offer have conditions, or not? The short answer: a condition is an emergency exit that says “I will buy if this checks out.” If you drop it, check the risk it was guarding against before you make the offer.

Start with a hypothetical example. It is Saturday evening, two hours before offers are due. The seller’s agent says five offers are in. Yours has a financing condition and an inspection condition. Suddenly, conditions look like a luxury.

This post is for anyone buying in Toronto or the GTA. It uses general information checked with RECO (the Real Estate Council of Ontario, which regulates agents) and the Ontario government. It is not legal advice, so check the wording of your agreement with a lawyer.

The answer first: the three conditions at a glance

• $350–$600Home inspection fees (ontario.ca, as of 2026; can be higher)
• 10 daysTime a condo corporation has to provide a status certificate (CAO)
• $100Cap on the status certificate fee, including tax (O. Reg. 48/01 s. 18(4))
• NoneLegal cooling-off period for a resale condo (ontario.ca)

RECO advises making your offer conditional, if possible, on financing, a home inspection, the sale of your existing home or other things that matter to you.

How conditions end: deadlines, waivers and the deposit

Conditions are written in the Agreement of Purchase and Sale (APS), each with a deadline. An offer with no conditions is a firm offer. With conditions it is a conditional offer, and the deal becomes firm once every condition is fulfilled or waived.

You clear a condition in writing. You sign a waiver or a notice of fulfillment and send it to the other side before the deadline. Under s. 22.10 of the TRESA regulation, an agent who receives a written waiver must pass it to their client as soon as possible, just like an offer.

“What if the deadline passes?” The condition clause in your agreement decides. If the deal ends, the deposit is normally returned as the agreement says. But if the two sides argue over the deposit, the brokerage can only release it with a release signed by both or a court order (RECO).

Financing condition: a pre-approval is not a promise

“I have a pre-approval, so can I drop the financing condition?” It is a common objection. FSRA (Ontario’s financial regulator) says a preapproval is not a guarantee that the lender will enter into a mortgage contract with you. The lender may decide not to lend after closely assessing you or the property.

RECO also says pre-qualifying for a mortgage (a rough estimate of what you could borrow) does not safely remove the need for a financing condition. In a hypothetical example, if the lender values the home $30,000 below your offer, you may have to cover that gap in cash.

(Opinion) To drop a financing condition, I think you need both an answer from the lender on this address and price, and spare cash to cover a low appraisal.

Inspection condition: time to look before you commit

RECO calls a home inspection one of the most common conditions in an offer. The Ontario government describes it as a visual check of major parts such as the foundation, electrical, plumbing and roof. It is not a pass or fail test, and it does not check zoning or building codes.

After the report, a buyer may ask for repairs, accept a defect, ask for a price adjustment or decide not to buy (ontario.ca). There are downsides too. An inspector cannot find everything. They may miss mould or be unable to check a roof under snow, and they give no warranty.

Instead of dropping the condition, you can have the home inspected before you offer. Even if the seller has a report, the Ontario government says buyers should get their own inspection too. If your offer fails, you do not get that cost back.

Sale-of-property condition and the condo status certificate

A sale-of-property condition says “I will buy if my current home sells by the deadline.” It protects the buyer from carrying two homes at once. For the seller, it ties their deal to someone else’s sale, so (opinion) it is the hardest of the three for sellers to accept.

Another path is to sell first, then buy. That brings a different risk: the two closing dates may not line up. RECO says to have a contingency plan in case the dates do not match.

With a condo, buyers often add a condition to review the status certificate (the condo corporation’s report on its money and legal state). A resale condo has no legal cooling-off period, so this condition may be your only time to read the papers after signing. The corporation must provide it within 10 days of a request, and the fee is up to $100 including tax (CAO).

Drop conditions in a bidding war?

When there are several offers, the seller’s brokerage must tell every buyer who made one how many competing offers there are (regulation s. 22.7(1)). The price or terms of other offers are shared only if the seller directs it.

RECO warns that in a competition you may be tempted to offer more than you planned or to remove conditions that protect you. It also calls skipping a home inspection a significant risk that a buyer needs to weigh carefully. Dropping conditions makes an offer look stronger, but all of that risk becomes yours.

Common mistakes and what to check

• Treating a pre-approval as a final loan and dropping the financing condition — ask the lender again about this home.
• Not checking whether the deadline counts “days” or “business days” — read the clause with your lawyer.
• Giving a waiver only by word of mouth — send it in writing before the deadline and keep the time it was sent.
• Dropping the inspection condition without a pre-inspection — weigh the $350–$600 cost (as of 2026) against the risk.
• Going firm on a condo without reading the status certificate — a resale condo has no cooling-off period.
• Buying without a sale-of-property condition and no plan if your home does not sell — make a backup plan for the dates first.

In short: conditions are the emergency exits that protect your deposit and your money, and if you drop one, check its risk before you offer. Your one task today: ask your lender, in writing, what happens if a home in your price range appraises low.