Sandeep Pawar
Broker
Home / Buy / Offers, deposits and conditions
Offers, deposits and conditions in Ontario
What goes into an Agreement of Purchase and Sale, and how your deposit is held. Plus how conditions let you walk away safely when something goes wrong.
The short answer: in Ontario an offer becomes a binding contract once buyer and seller both sign it. Three parts decide your risk: the price, the deposit, and the conditions. The deposit is usually held in the listing brokerage’s trust account. Conditions such as financing, inspection or a condo status certificate review let you end the deal if something fails before a set deadline. A resale purchase has no cooling-off period, so the conditions are your only exit.
What an offer contains
In Ontario most resale offers are written on a standard Agreement of Purchase and Sale, with schedules added for anything specific to your deal. Every line matters, not just the price.
| Part of the offer | What it does | What to check |
|---|---|---|
| Buyer, seller and property | Names the legal parties and the property. | Every buyer who will be on title is named, spelled as on their ID. |
| Price | What you agree to pay. | It is set from comparable sales, not from the list price. |
| Deposit | Money you pay to show good faith, credited to the price at closing. | The amount and the deadline, often within 24 hours of acceptance. |
| Irrevocable date | How long the seller has to answer. | Long enough for the seller, short enough that you are not tied up for days. |
| Conditions | Events that must happen for the deal to go ahead. | Each has a clear deadline and says who it benefits. |
| Closing date | The day you pay and get the keys. | It fits your lease, your sale and your mortgage rate hold. |
| Included items and rentals | Lists the chattels and fixtures that stay, and any rented equipment such as a water heater. | Appliances, light fixtures and window coverings are listed by name. Rental contracts are disclosed. |
| Title search period | Time for your lawyer to check ownership and claims on the property. | Your lawyer is hired early enough to use it. |
| Schedules | Extra clauses: conditions, warranties, visits before closing. | Read every schedule. It can change the meaning of the standard form. |
Your deposit: how much, where it goes, how it is protected
The deposit is part of your down payment, paid early. No law sets the amount; it is negotiated, and a larger deposit can make an offer stronger in a competitive market.
- Where it sits: usually in the listing brokerage’s real estate trust account until closing, when it is credited to the price.
- If the brokerage fails: RECO’s consumer deposit insurance covers losses from brokerage theft, fraud, insolvency or misappropriation, up to $200,000 per claim. It costs you nothing.
- If the deal fails: the brokerage can only release the money under a release signed by both parties, or a court order. Insurance does not cover a disagreement about who gets it.
- If no one claims it: after two years without a decision, an unclaimed deposit is transferred to RECO, which holds it in trust.
Pay the deposit exactly as the agreement says: on time, to the named brokerage, by bank draft or wire. A late deposit can give the seller a reason to end the deal.
Conditions and what each one protects
A condition is a door you can walk out of before the deal becomes firm. Each one needs a deadline, and the deadline is set in the offer, often a few business days after acceptance.
| Condition | Protects you from | Watch for |
|---|---|---|
| Financing | Your lender refusing the mortgage or appraising the home below the price. | A pre-approval is not a final approval. The lender still has to approve this home. |
| Home inspection | Expensive defects you could not see on a showing. | Book the inspector the day the offer is accepted. How to use an inspection. |
| Status certificate review | Condo money problems: low reserves, special assessments, lawsuits. | The corporation has up to 10 days to deliver it. Leave your lawyer time to read it. |
| Lawyer’s review | Clauses or schedules you do not understand. | Useful when a seller’s schedule is unusual, as with a power of sale. |
| Sale of your home | Owning two homes and two mortgages. | Sellers often accept it only with an escape clause. See buying and selling at once. |
| Insurance | A home you cannot insure at a reasonable price. | Older wiring, oil tanks and past claims can affect coverage. |
Prepare before you write anything
The strongest offers are prepared before you see the house a second time.
What happens
You confirm your budget, your deposit funds and your walk-away price, and we study recent sales of similar homes.
What you do
Get a current pre-approval. Move your deposit money into an account you can draw on within a day.
Documents and people
Pre-approval letter, proof of deposit funds, the listing and any seller disclosure documents.
Watch for
Falling for a home before you know what it is worth. Decide your top price while you are calm.
How I help
I pull the comparable sales, days on market and price history for the home, and we agree your walk-away number before writing a word.
Write the offer
Price, deposit, conditions and dates are chosen together. Changing one changes the value of the others.
What happens
We complete the Agreement of Purchase and Sale and any schedules, then send it to the listing brokerage.
What you do
Read the whole offer before signing, including the schedules. Ask about anything you do not understand.
Documents and people
The draft agreement, schedules, and the confirmation of co-operation and representation.
Watch for
Vague included items, such as ‘all appliances’. Name them. Missing deadlines on conditions.
How I help
I write conditions that protect you without making the offer look weak, and I explain every clause in plain language.
Negotiate: sign-backs and counter-offers
Few first offers are accepted as written. Expect a sign-back.
What happens
The seller accepts, rejects, or signs back with a different price or terms. Each sign-back has its own irrevocable time.
What you do
Decide quickly but not in a panic. Look at the full package, not only the price gap.
Documents and people
Each version of the agreement, initialled where it changes.
Watch for
Bidding against yourself. Moving on price when the seller cares more about the closing date.
How I help
I find out what the seller needs, and I trade terms that cost you little for price that matters to you. How I negotiate.
Watching a home and wondering what to offer?
Book a 30-minute callAcceptance and the deposit
Once both sides have signed every change and the signed copy is delivered, you have a contract.
What happens
The accepted agreement is shared, and your deposit is delivered to the brokerage named in it.
What you do
Deliver the deposit by its deadline. Send the accepted agreement to your lawyer and lender the same day.
Documents and people
Bank draft or wire confirmation, deposit receipt, signed agreement.
Watch for
A late or short deposit. It can put the whole deal at risk.
How I help
I confirm the deposit has been received and put every condition deadline on one shared calendar.
Satisfy or waive the conditions
Each condition is cleared by a signed notice before its deadline. If a condition is not cleared, the deal can end.
What happens
You inspect, your lender approves, your lawyer reviews documents. Then you sign a waiver or notice of fulfilment.
What you do
Give the lender everything they ask for, fast. Read the inspection report in full before you waive.
Documents and people
Inspection report, lender commitment, status certificate, waiver or amendment.
Watch for
Letting a deadline pass by accident. Signing a waiver before the lender has actually approved the property.
How I help
If the inspection finds something serious, I go back to the seller for a price change, a credit or a repair, in writing.
From firm to closing
Once every condition is waived or fulfilled, the deal is firm and both sides are bound to close.
What happens
Your lawyer searches title, receives the mortgage instructions and prepares the closing documents.
What you do
Arrange home insurance, book movers and send your lawyer the balance of the down payment and closing costs.
Documents and people
Insurance binder, ID, funds for closing, signed mortgage documents.
Watch for
New debt or a job change before closing. Your lender can check again.
How I help
I stay with you to the keys. Your closing-day checklist.
Should you ever waive conditions?
Sometimes, but only when you have already done the work the condition protects. RECO warns that removing the inspection condition to look more attractive is a significant risk. It also says pre-qualifying for a mortgage does not remove the need for a financing condition.
| Before you go firm, you should have | Why |
|---|---|
| A pre-offer inspection, or a clear plan to accept the home’s condition | A firm offer means you own every defect. |
| A full lender approval, or the cash to close without it | If the appraisal is lower than your price, you pay the gap in cash. |
| The status certificate reviewed by your lawyer (condos) | Information in the certificate binds the corporation, and gaps in it can matter later. |
| Money set aside for repairs and closing costs | Budget 1.5% to 4% of the price for closing costs alone. |
Competing with other buyers? Read how multiple offers work before offer night.
Before you sign an offer
- Pre-approval is current and the rate hold covers your closing date
- Deposit funds are available within 24 hours
- You know the fair price range from recent comparable sales
- Your walk-away price is agreed and written down
- Each condition has a deadline you can actually meet
- Inspector and lawyer are booked or on standby
- Included items and rental equipment are named
- The closing date works with your lease or your sale
- You have read every schedule, not just the first page
Questions buyers ask
Is there a cooling-off period when I buy a resale home in Ontario?
No. The 10-day cooling-off period in Ontario’s Condominium Act applies to new condominium units bought from a builder. A resale offer is binding once both sides sign it, so your only exits are the conditions you wrote into it.
How much deposit do I need to give with an offer?
No law sets a fixed amount. The deposit is negotiated, and the listing often says what the seller expects. It is part of your down payment, not an extra cost, and it is credited to the price on closing day.
Who holds my deposit?
Usually the listing brokerage, in its real estate trust account. If the brokerage is lost to theft, fraud or insolvency, RECO’s consumer deposit insurance covers up to $200,000 per claim. It does not cover a dispute between buyer and seller.
Do I get my deposit back if my financing condition fails?
If a valid condition is not met by its deadline, the deal usually ends and the deposit should be returned. The brokerage can only release a deposit from trust under a release signed by both parties or a court order, so expect paperwork.
What happens if I back out of a firm deal?
You will likely lose your deposit, and the seller may sue you for further losses, for example if they resell for less. Talk to a real estate lawyer before you do anything.
What is the irrevocable date on an offer?
It is the deadline for the seller to respond. Until then you have promised not to withdraw the offer. After it passes without acceptance, the offer is no longer valid.
What is a sign-back?
A counter-offer. The seller changes your price or terms, signs, and sends it back. You can accept, sign it back again, or let it lapse.
Can I make my offer conditional on selling my current home?
Yes, but sellers often see it as weak, and many will only accept it with an escape clause that lets them keep marketing. It works best in a slower market.
Sources
- RECO: consumer deposit insurance FAQ
- RECO: competing offers (inspection and financing conditions)
- RECO: buyer’s checklist
- CMHC: making an offer to purchase a home
- Condominium Authority of Ontario: status certificates
- Condominium Authority of Ontario: pre-construction condos (10-day cooling-off)
- Financial Consumer Agency of Canada: buying a home (closing costs)
Write your offer with the numbers in front of you
Send me the home you are watching. I will show you the comparable sales, the fair range and the terms I would put in the offer.