To purchase real estate in Ontario you typically work with a Realtor to submit an offer on a form called the Agreement of Purchase and Sale. The legally binding agreement that outlines the terms and conditions of the purchase of the property.

The offer will contain details about the purchase price, the closing date, and any conditions that must be met before the sale is finalized. A conditional offer means that your offer is subject to certain conditions to be met before becoming legally binding.

Below are some examples of conditions that could be included in a residential real estate purchase offer:

  • Financing or Mortgage Approval
  • Home inspection to be completed by a professional home inspector
  • Well water test if the property is in a rural area
  • Review of the Status Certificate Review and Condominium documents by a Lawyer
  • Conditional on the sale of the Buyer’s home
  • Conditional on approval by the Buyer’s solicitor
  • The Seller agrees to remediate any outstanding deficiencies (eg. Asbestos, Damages, vermiculite etc…) before closing

Conditional Period at a Glance

Once the Seller accepts the offer with conditions, it goes into a conditional period where the Buyer completes their due diligence in good faith to fulfill the conditions. If the offer was accepted conditionally on the Buyer obtaining a mortgage, the Buyer then signs a Notice of Fulfillment to satisfy the financing condition once the Mortgage Broker gives their approval. This period typically takes 3-5 business days.

The same process occurs during a conditional period of a home inspection condition. Once the home inspector provides their report, and the Buyer is satisfied with the results, they sign the notice of fulfillment to satisfy the home inspection condition. This can take anywhere between 1-5 days depending on the terms agreed to with the seller on the offer.

What if a Condition is Not Met?

If any condition is not met and the Buyer cannot satisfy their requirements to meet the conditions, the Buyer would then sign and submit a mutual release to be signed by all parties including the Broker of Record from the listing Brokerage. The Buyer is then released from the transaction and their deposit is returned typically in the form of a bank draft.

It is always prudent to seek professional advice. Consulting with a real estate lawyer can provide important information especially if there are contingencies or special requests specific to the property and outside the typical real estate language.

Working with a Realtor is beneficial when making an offer on a home. They can provide guidance on not only the price but inserting the right conditions to ensure that they are working in your best interests and to help you make informed decisions.

Do you have any topics you would like us to write about? Have any real estate questions?  Feel free to reach out: 416.319.6893 or book a meeting!