Conditional vs Firm Offers: What Each One Actually Costs You

Buyer Advice Dave Dubbin August 28, 2026

A conditional offer gives you a defined window to walk away for a defined reason and get your deposit back. A firm offer is binding the moment the seller signs it, with no escape hatch. That is the whole difference, and it is bigger than it sounds. A condition is protection you are asking the seller to give you, and sellers price it. In a competitive situation the condition-free offer usually wins, which is exactly why the buyer who wrote it needs to have done the homework first.

Not sure how much protection your offer actually needs? Book a call and we will walk through it before you sign anything.

What "firm" means in Ontario

Firm means the agreement is complete on acceptance. There is no inspection period, no financing out, no status certificate review. Your deposit, commonly around five percent of the purchase price and typically due within twenty four hours of acceptance unless the wording says otherwise, is now at risk. If you cannot close, the deposit is the first thing you lose, and the seller's claim does not necessarily stop there.

People hear "you lose your deposit" and treat it as the ceiling. It is not. It is the floor.

The conditions Ontario buyers actually use

Condition	What it protects you from	Typical window
Financing	Your lender declining the property, the appraisal, or you	Three to five business days
Home inspection	Structural, mechanical and moisture problems you could not see	Three to five business days
Status certificate review	A thin reserve fund, a special assessment, litigation, rental restrictions	Often ten days from receipt
Sale of buyer's property	Owning two homes at once	Thirty to ninety days, usually with an escape clause for the seller
Lawyer review	Title issues, easements, unusual clauses	Two to five business days
Insurance	Finding out the property is difficult or expensive to insure	Three to five business days

Windows are what we see most often in the west end. Every one of them is negotiable, and the exact wording matters more than the length.

A condition is an option, and options are never free

Think of a condition the way a finance desk would think about it. You are buying an option: the right, but not the obligation, to complete the purchase, exercisable inside a fixed window. Options have value. Anyone selling you one is going to want to be paid for it.

The seller pays for your option in two currencies. First, time. For those five days the property is off the market and they carry the risk that you walk and they have to relist into a colder week. Second, information. If you walk after an inspection, the next buyer wants to know why, and the listing now carries a small stain. That is adverse selection at work, which is what happens when the party with less information starts assuming the worst about what the other party learned.

So when two offers land at the same price and one is firm, the firm one is worth more to the seller even though the number is identical. That is not sellers being unreasonable. That is them pricing an option correctly.

Three more that pair with this one:

What a firm offer risks, in dollars

Here is the arithmetic, using round numbers. Say you go firm at $750,000 with a five percent deposit and then cannot close, for whatever reason. The seller relists and eventually sells for $710,000, four months later.

Line	Amount
Your firm purchase price	$750,000
Deposit paid on acceptance (5%)	$37,500
Seller's eventual resale price	$710,000
Shortfall against your contract	$40,000
Four months of carrying cost the seller did not plan for	varies
Relisting and legal costs	varies
Exposure beyond the forfeited deposit	$2,500 plus costs

Illustrative arithmetic, not a prediction and not legal advice. What a seller can actually recover depends on the agreement, their duty to mitigate, and a court. We are brokers, not lawyers. Talk to one before you sign a firm offer.

The point of the table is not the specific number. It is the shape of the risk. Your downside on a firm offer is not capped at the deposit, and the gap widens in a falling market, because the seller's resale is more likely to land below your contract price. Firm offers are cheapest to write when prices are rising and most expensive when they are not.

What the market says right now

Conditions are widely accepted across the GTA at the moment, and the numbers explain why. In July 2026, TRREB reported 5,995 GTA sales, down 0.9% from a year earlier, against 14,484 new listings, down 17.8%. Condo apartments sold at 97% of list and took 40 days on market. The average GTA price was $1,003,956, down 4.5%, and the HPI composite was down 4.6%.

But the direction changed in July. The sales to new listings ratio climbed to 41.4%, up from 39.2% in June and 34.6% a year ago. That ratio is the simplest tightness gauge there is: it just asks what share of newly listed homes found a buyer. It is rising because listings are falling faster than sales, not because demand surged. Supply in housing is inelastic in the short run, meaning it cannot respond quickly to price, so when sellers step back the market can tighten even with flat demand.

Translation for your offer: today you can usually get a financing condition and an inspection condition on a house, and a status certificate condition on a condo, without losing the deal. That is not a permanent state of the world.

How to go firm without going blind

If you decide the situation calls for a firm offer, you are not skipping the diligence. You are moving it earlier and paying for it yourself.

Full lender approval, not a pre-approval. A pre-approval qualifies you. It does not approve the property. Get the lender comfortable with the specific address.
Know your stress test headroom. The OSFI minimum qualifying rate is still the greater of your contract rate plus two percent or 5.25%, unchanged since January 2026. Know what that qualifies you for before you write, not after.
Pre-inspection. Book it during the showing window. You pay for an inspection you might not use. That is the cost of the option you decided not to buy from the seller.
Read the status certificate first. On a condo, request and review it before offer night. Reserve fund, current litigation, planned assessments, rules on rentals and pets.
Budget for an appraisal gap. If the lender values the property below your price, you fund the difference in cash. On a firm offer there is no condition to fall back on.
Have the lawyer look at the title search early if anything about the property is unusual.

What would change this

Two things. If new listings keep contracting and the sales to new listings ratio pushes into the mid forties and higher, condition-free offers come back into fashion quickly, and buyers who insist on a full slate of conditions start losing properties. If instead listings rebound in the fall and the ratio slides, conditions get easier still and you may find you can add a sale-of-property condition that nobody would look at today.

The Bank of Canada's next decision lands September 2. The policy rate has sat at 2.25% through six consecutive holds. A move in either direction would flow into fixed and variable pricing and into what buyers can carry, which is upstream of everything on this page.

Deciding whether to write firm on a specific property is not a philosophy question, it is a diligence question with a deadline. Book a call and we will tell you what has to be in hand before we would let you go firm on that address, and what it will cost you to get there. If the answer is that you should not, we will say so. Reach us here.

Dave Dubbin
Real Estate Expert
Dave Dubbin & Associates
Real Estate Broker for Etobicoke and Toronto
Sotheby’s International Realty, Canada