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Ontario Real Estate Glossary
Conditional Offer
An Agreement of Purchase and Sale that includes one or more conditions (financing, inspection, status certificate review) that must be fulfilled or waived within a stated period before the offer becomes binding. The buyer can walk away if a condition fails, with deposit returned.
What is a conditional offer in Ontario real estate?
A conditional offer is an Agreement of Purchase and Sale that includes one or more conditions (financing, inspection, status certificate review, sale of the buyer's existing property) that must be fulfilled or waived within a stated period before the offer becomes binding. If a condition fails, the buyer can walk away and the deposit is returned. Once all conditions are waived, the offer becomes firm and the buyer is legally committed.
Common residential conditions
| Condition | Typical period | What it protects |
|---|---|---|
| Financing | 5 business days | Buyer's mortgage approval |
| Home inspection | 5-7 business days | Discovery of property defects |
| Status certificate review (condos only) | 5-10 business days | Condo financial and legal health |
| Sale of buyer's property (SPP) | 30-60 days | Buyer needs to sell first |
| Lawyer review | 2-3 business days | Pre-closing legal review |
| Insurance | 3 business days | Buyer can obtain home insurance |
Each condition has its own deadline. The buyer must deliver a Notice of Fulfillment / Waiver (Form 510) to the seller within the period to keep the deal alive.
How conditions are waived
A condition is satisfied either by:
- Fulfillment: the condition's requirement is met (e.g., financing approved, inspection clean) and the buyer formally accepts
- Waiver: the buyer chooses to drop the condition voluntarily even if the requirement isn't fully met
Both are documented on OREA Form 510. Failing to deliver Form 510 by the deadline terminates the agreement automatically. The deposit is returned and both parties walk away. This is a frequent reason residential deals fall apart in Ontario.
Conditional vs firm offers
In multiple-offer situations, firm offers (no conditions) are typically more attractive to sellers because they remove the risk that the buyer walks away. A conditional offer at $710,000 may lose to a firm offer at $700,000 in a competitive bid. Buyers waive conditions to win the bid but accept the risk that an issue discovered after waiving cannot be raised.
Frequently asked questions
How long does a conditional offer last in Ontario?
A conditional offer in Ontario lasts only as long as the conditional period stated in the offer: typically 5-10 business days for individual conditions. The total conditional period is the longest individual condition. After the period expires without a waiver or fulfillment notice, the agreement terminates automatically and the deposit is returned.
Can a seller accept other offers during a conditional period?
Generally no, the seller cannot accept other offers during the conditional period because the property is already under contract. The buyer has the right to fulfill or waive. The seller can include an escape clause in the agreement letting them entertain other offers, in which case the buyer typically gets 48-72 hours to waive their conditions when a bona fide third-party offer comes in.
What happens if a condition fails?
If a condition fails (financing falls through, inspection finds a serious defect, status certificate reveals a major issue) the buyer typically delivers a Notice of Termination before the deadline. The agreement ends, the deposit is returned to the buyer, and both parties walk away. There is no penalty unless the buyer acted in bad faith.
Can I add my own conditions to an offer?
Yes, conditions are negotiable in an offer. Beyond the standard financing/inspection/status conditions, buyers add bespoke conditions for items like soil testing, well-water analysis, easement registration, severance approval, or financing at a specified interest rate ceiling. Sellers can refuse any condition; the back-and-forth is part of the offer negotiation.
What is "conditional on the seller purchasing a home" in Ontario?
A "conditional on seller purchasing a home" clause (sometimes called a seller-side bridge condition or SOP — Subject to Seller's Purchase) is a condition the seller asks for: the agreement only firms up once the seller has successfully purchased their next property. It protects sellers who don't want to be left without a home if their own buying offer fails.
This is the seller-side mirror of the more common "Sale of Buyer's Property" (SPP) condition. It's used when:
- The seller has listed their current home but hasn't yet bought their next one
- The seller wants to avoid bridge financing or temporary housing if their next purchase falls through
- The buyer is willing to wait while the seller secures their replacement property
Practical features:
- Timeline: typically 30-60 days, sometimes longer in slower markets where the seller's next purchase may take time
- Waiver: the seller delivers a Notice of Fulfillment / Waiver (Form 510 with seller-side wording) once they've firmed up on their next home
- Risk to the buyer: the buyer is locked in but the seller can walk away if their own purchase doesn't materialize. Buyers in this position should ensure the deposit is held in trust and recoverable, and should weigh the deal against simpler firm offers from other sellers
- Escape clause for the buyer: less common in this direction, but a buyer can negotiate one — usually 48-72 hours to either accept the seller's still-pending position or terminate
This condition appears in the OREA Form 100 (Agreement of Purchase and Sale) under "Conditional on Seller Purchasing a Home" and is added via a seller's schedule. It is heavily tested on Course 2's exam under the conditions and waivers chapter.
Practice this topic
ExamAce covers conditional offers, waivers, and Form 510 timing in the Course 2 question bank.
See it in practice
Walk through a realistic Ontario scenario where Conditional Offer matters — with the decision point, the correct move, and the pitfall.
Authoritative sources
Related terms
Agreement of Purchase and Sale
The legally binding contract under which a buyer and seller agree to a real estate transaction in Ontario, capturing price, deposit, conditions, irrevocability, and closing terms. The standard residential APS is OREA Form 100.
Status Certificate
A package of documents prepared by an Ontario condominium corporation that discloses the condo's financial, legal, and physical condition to a prospective buyer or lender.
Buyer Representation Agreement
A written contract between a buyer and a real estate brokerage that establishes the brokerage as the buyer's representative under TRESA. Defines the duration, geographic area, commission, and the duties the brokerage owes the buyer. The standard Ontario form is OREA Form 300.