Making an offer on a home is the most consequential legal step in the buying process. The Agreement of Purchase and Sale (APS) is a binding contract, and the terms you include — price, conditions, deposit, closing date — determine your rights, risks, and negotiating power. This guide covers exactly what goes into a Canadian offer, how to protect yourself, and what happens at each stage.
Anatomy of an Offer (Agreement of Purchase and Sale)
| Section | What It Contains |
|---|---|
| Parties | Legal names of buyer(s) and seller(s) |
| Property | Legal address, lot and plan number, land registry description |
| Purchase price | Your offered price |
| Deposit | Amount, when it is due, and who holds it in trust |
| Irrevocability | How long the seller has to accept, reject, or counter your offer |
| Closing date | The date title transfers and you get the keys |
| Conditions | Financing, inspection, status certificate, sale of property — each with a deadline |
| Chattels included | Moveable items included (appliances, window coverings, light fixtures) |
| Fixtures excluded | Attached items the seller is taking (specific light fixtures, shelving, etc.) |
| Rental items | Hot water tank, furnace, security system rentals that the buyer assumes |
| Additional terms | Any negotiated terms (seller to do specific repairs, buyer to assume tenant leases, etc.) |
| Representations and warranties | Seller warrants certain facts (e.g., no urea formaldehyde insulation, no knowledge of environmental issues) |
| Schedules | Additional pages (Schedule A or B) with detailed clauses |
Types of Offers
| Type | Definition | When to Use |
|---|---|---|
| Conditional offer | Includes conditions (financing, inspection, etc.) that must be met before the deal is firm | Default for most transactions — protects you |
| Firm offer (no conditions) | No conditions — the deal is binding immediately upon acceptance | Competitive bidding wars only; carry significant risk |
| Pre-emptive (bully) offer | Submitted before the seller’s scheduled offer date | When you want to secure the property before competing offers come in |
| Multiple offers | Seller receives more than one offer simultaneously | Your agent advises on strategy; typically requires a stronger offer |
| Counter-offer | Seller changes the terms and sends back their own offer for your acceptance | Normal negotiation — can go back and forth |
| Back-up offer | Your offer is accepted contingent on the first-place offer falling through | Low-risk position; you may or may not get the property |
Key Conditions Explained
Financing Condition
| Detail | Standard Practice |
|---|---|
| What it says | “This offer is conditional upon the buyer arranging satisfactory financing” |
| Typical deadline | 5–10 business days after acceptance |
| What you need to do | Finalize mortgage approval with your lender within the deadline |
| If not met | You notify the seller you cannot waive; deposit is returned; deal is void |
| If met | You sign a waiver; the condition is removed; deal becomes firm on this point |
| Risk of waiving | If your financing falls through after waiving, you are legally committed to close |
Inspection Condition
| Detail | Standard Practice |
|---|---|
| What it says | “This offer is conditional upon the buyer obtaining a satisfactory home inspection” |
| Typical deadline | 5–7 business days after acceptance |
| What you need to do | Schedule and complete a home inspection; review the report |
| If issues found | Negotiate repairs, price reduction, or credit — or walk away |
| If satisfied | Sign the waiver; condition removed |
| Tip | Book the inspector before making the offer so they can inspect immediately upon acceptance |
Status Certificate Condition (Condos)
| Detail | Standard Practice |
|---|---|
| What it says | “This offer is conditional upon the buyer’s lawyer reviewing the status certificate and finding it satisfactory” |
| Typical deadline | 5–10 business days |
| What the lawyer reviews | Reserve fund study, financial statements, meeting minutes, bylaws, rules, insurance certificate, any pending litigation or special assessments |
| Red flags | Low reserve fund, upcoming special assessment, active litigation, rental restrictions |
Sale of Buyer’s Property Condition
| Detail | Standard Practice |
|---|---|
| What it says | “This offer is conditional upon the buyer selling their existing property” |
| Typical deadline | 30–90 days (negotiated) |
| How it works | If you don’t sell within the deadline, you can walk away |
| Seller’s escape clause | Many sellers include a 48–72 hour “escape clause” — if they receive another offer, they give you 48–72 hours to waive the condition or lose the deal |
| Strong alternative | Obtain a bridge loan or sell first to avoid this condition (sellers dislike it) |
The Deposit
| Aspect | Details |
|---|---|
| Typical amount | 1–5% of purchase price |
| When due | Typically within 24 hours of acceptance (certified cheque or bank draft) |
| Held by | Listing brokerage’s trust account or seller’s lawyer |
| Applied at closing | Applied against the purchase price |
| If deal completes | Part of your total payment |
| If you walk away (conditions not met) | Returned in full |
| If you walk away (conditions waived / firm offer) | Seller may keep the deposit as liquidated damages; may also sue for additional losses |
Deposit Strategy
| Market Conditions | Recommended Deposit | Why |
|---|---|---|
| Buyer’s market (low competition) | 1–2% | Lower risk; less cash tied up |
| Balanced market | 2–3% | Shows seriousness without overcommitting |
| Seller’s market (high competition) | 5%+ | Demonstrates strong commitment; makes your offer stand out |
| Multiple competing offers | 5%+ | Standard in bidding wars; anything less looks weak |
Closing Date Strategy
| Factor | Guidance |
|---|---|
| Standard closing | 30–90 days from acceptance |
| Seller’s preferred closing | Ask the listing agent — matching the seller’s preferred date can win you the deal |
| Short closing (15–30 days) | Aggressive — may appeal to motivated sellers; hard to arrange financing and inspections |
| Long closing (90–120 days) | Gives you time; seller may prefer if they haven’t bought their next home |
| Closing day of the week | Avoid Fridays (if anything goes wrong, offices are closed for the weekend). Tuesday–Thursday is ideal |
| Closing near month-end | More closings happening = busier lawyers and lenders = higher risk of delay |
Offer Strategy for Different Scenarios
Buyer’s Market (More Supply Than Demand)
| Strategy | Details |
|---|---|
| Offer below asking | 5–10% below asking is reasonable starting point |
| Include all conditions | Protect yourself — no pressure to remove them |
| Longer irrevocability | Give the seller more time to consider |
| Negotiate inclusions | Ask for appliances, window coverings, or other chattels |
| Ask for closing cost credit | Seller may agree to contribute $2,000–$5,000 toward your closing costs |
Seller’s Market / Multiple Offers
| Strategy | Details |
|---|---|
| Offer at or above asking | Data-driven — base your price on recent comparable sales, not the asking price |
| Minimize conditions | Pre-approval letter + pre-offer inspection = you can submit with fewer conditions |
| Larger deposit | 5%+ signals commitment |
| Flexible closing date | Match the seller’s preference |
| Clean offer | Simple language; no unusual requests |
| Escalation clause (use with caution) | “I will beat the highest offer by $X up to a maximum of $Y” — not used everywhere; some sellers’ agents don’t accept them |
Pre-Emptive (Bully) Offer
| Aspect | Details |
|---|---|
| When to use | Before the seller’s scheduled offer date; when you believe the property is underpriced or will receive many offers |
| Typical strategy | Strong price (above asking), large deposit, fewer conditions, seller’s preferred closing date |
| Risk | Overpaying because you haven’t seen competing offers |
| Seller’s options | Accept, reject, or ignore your offer and wait for offer night |
After the Offer Is Accepted
| Step | Timeline | Action |
|---|---|---|
| 1. Deposit | Within 24 hours | Deliver certified cheque or bank draft to the trust holder |
| 2. Mortgage application | Immediately | Submit formal application if not already done; provide APS to lender |
| 3. Home inspection | Within 3–5 days | Schedule and complete; review report |
| 4. Appraisal | Lender-ordered (1–2 weeks) | Lender sends appraiser to confirm property value supports the mortgage |
| 5. Condition waiver/fulfilment | By each condition deadline | Sign waiver forms through your agent |
| 6. Lawyer engagement | Immediately | Share APS with your real estate lawyer; they begin title search |
| 7. Insurance | Before closing | Arrange home insurance — lender requires proof before funding the mortgage |
| 8. Final walkthrough | Day of or day before closing | Verify the property is in the agreed condition; all included chattels are present |
| 9. Signing with lawyer | 1–5 days before closing | Sign mortgage and transfer documents; provide closing funds |
| 10. Closing day | Closing date | Lawyer registers transfer; funds are released; you get the keys |
Provincial Differences
| Province | Offer / Contract Name | Key Differences |
|---|---|---|
| Ontario | Agreement of Purchase and Sale (OREA form) | Standard form used by most agents; very detailed conditions schedule |
| BC | Contract of Purchase and Sale | 3-day rescission period (0.25% penalty); subjects (conditions) are standard |
| Alberta | Residential Purchase Contract (AREA form) | Simpler form; no land transfer tax; conditions commonly included |
| Quebec | Promise to Purchase / Offer to Purchase | Notary-based system; different legal framework under Civil Code; French may be required under Bill 96 |
| Manitoba | Offer to Purchase (MREA form) | Standard form; similar to Ontario process |
| Saskatchewan | Offer to Purchase | Similar to Alberta |
| Atlantic provinces | Agreement of Purchase and Sale | Standard across NB, NS, PEI, NL; processes similar to Ontario |
Common Offer Mistakes
| Mistake | Consequence | Prevention |
|---|---|---|
| Waiving all conditions in a bidding war | No protection if financing falls through or major defects found | Do a pre-offer inspection; get a firm pre-approval |
| Not including specific chattels in writing | Seller takes the dishwasher, curtains, or shed you expected to keep | List every item you expect included in the APS |
| Setting condition deadlines too short | Not enough time to arrange inspection or financing | 5–10 business days is standard — don’t go below 3 |
| Offering based on asking price, not comparables | Overpaying or underbidding | Always review recent sold prices in the neighbourhood |
| No lawyer before submitting the offer | Missed legal issues in the APS | Have a lawyer on standby before making any offer |
| Submitting without pre-approval | Financing condition may not be met; waste of everyone’s time | Get pre-approved before house shopping |
| Missing the irrevocability deadline | Offer expires before seller responds | Set a reasonable window (12–24 hours typically) |