The only real difference
Buyers often think of a firm offer as a gamble and a conditional offer as the safe choice. That misses the point. Either way, the same questions need answers: Is the house sound? Is the financing solid? Is there anything on the title, the permits or in the building's records that changes the picture? The only difference is when you answer them.
With a condition, you answer them after the seller accepts. With a firm offer, you answer them before you sign. In a competitive market, that often decides who gets the house.
We'd only suggest going firm when we have all the information needed to make a decision and you understand any risks that remain. It's your call, not ours. Our job is to make sure you make it with the full picture. (Our pre-offer checklist is here: The checks we run before you commit.)
When a condition makes sense, and for how long
If our early checks turn up something that needs a closer look, like a structural question, a permit issue or a specialist's opinion, we may need a condition. What we're checking decides how long it runs. Three business days is typical. Five is sometimes justified.
The market sets how much room you have:
- In a competitive market, sellers don't welcome conditions. If you include one, keep it short and specific.
- In a slower market, or for a type of property with less competition, buyers have more leverage. That's what a buyer's market means. We can negotiate longer due diligence periods and more conditions if we need them.
Financing without a financing condition
Financing is the condition that comes up most often. The approach is the same: do the heavy lifting in advance.
- Work with a good mortgage broker or lender. Settle the details early, like rate, product and terms, so you can decide with the full picture.
- Make sure they're responsive. On offer night we sometimes need to run a final number past the lender at 7 p.m. A quick answer can be the difference between getting the house and losing it.
- Agree on the number together. Your broker knows your finances, and together we know where the house should land on value. We work through the numbers as a group and only go ahead when everyone is confident it works.
- Plan for a short appraisal. Sometimes the lender's appraisal comes in below the purchase price. Nobody wants that news, but we talk through the options beforehand, so there's a plan if it happens.
Our own inspection, so we can go firm
Many Toronto sellers provide a pre-listing home inspection. It's a useful starting point, but it isn't a guarantee.
More than once, my clients wanted to make a preemptive offer on a house that had no inspection available. More than once, too, the seller's report and what we saw on the walk-through simply didn't match. In both cases we arranged a quick inspection of our own before submitting.
It costs $600 to $800, depending on the size of the home and the type of inspection, plus a few hours of their time. In return, my clients could make a firm offer, often the strongest kind on the table, knowing exactly what they were buying.
Frequently asked questions
What is a firm offer? An offer with no conditions. Once the seller accepts, the deal is binding, so any inspection, financing check or document review has to happen before you submit.
What is a conditional offer? An offer that becomes binding only once certain conditions are met within a set time, most commonly financing, a home inspection or, for condos, a review of the status certificate (how to read one).
How long do conditions usually last in Toronto? Typically three to five business days. In a competitive market, sellers expect them to be short. In a slower market, buyers can often negotiate more time.
Is a pre-approval enough to go firm? On its own, no. A pre-approval is a starting point. Before going firm, confirm the details with your lender, make sure they can respond quickly on offer night, and have a plan in case the appraisal comes in below the price.
Can I rely on the seller's home inspection? It's a useful starting point, not a guarantee. If it doesn't match what you see, or there isn't one, get your own before you go firm.
