Essential Conditions When Buying a House in Ontario

Buying a home is one of the most significant financial decisions you’ll ever make, especially if it’s your first time. In Ontario’s competitive real estate market, protecting yourself legally and financially is crucial. One of the best ways to do that is by including the right real estate clauses and conditions in your offer.

In this post, we’ll cover the essential conditions and clauses when buying a house, what they mean and why they matter. Understanding what conditions you should put on a house offer can make all the difference between a smooth closing and an expensive mistake.

Find out which common conditions for buying a house that smart buyers include when making an offer!

What Is a Conditional Offer?

A conditional offer means your purchase of the home depends on one or more specific conditions being met. If those conditions aren’t satisfied, you (as the buyer) typically have the right to walk away from the deal without penalty.

Including the right clauses in your offer isn’t just good practice, it’s often essential.

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Financing

This is one of the most important clauses for first-time buyers. Even if you’ve been pre-approved for a mortgage, it doesn’t guarantee final approval. The financing condition gives you a specific number of days (typically around 5) to confirm that your lender will finance the purchase based on the exact property, purchase price and your financial situation.

If your financing falls through after your offer becomes firm and you cannot close on the home, you could lose your deposit or worse, face legal consequences. This clause protects you from that.

Home Inspection

A home inspection clause allows you to hire a professional inspector to assess the home’s structure, systems and overall condition. If the inspection reveals serious issues such as foundation cracks, a leaky roof or mould, you can either walk away or try to renegotiate the price. It’s important to note that the inspection is meant to detect issues that are unseen during a viewing.

In Ontario, homes are sold “as is” unless otherwise stated. Without this clause, you accept the home in whatever condition it’s in with no recourse later on.

Status Certificate Review (for Condos)

If you’re buying a condominium in Ontario, this clause is an absolute must. The status certificate outlines the financial and legal health of the condo corporation. It details whether there are lawsuits, special assessments or major reserve fund shortfalls.

This condition gives your lawyer time (typically 1-2 weeks) to review the status certificate and advise you accordingly.

A healthy condo corporation means a lower risk of sudden fee hikes or major repairs coming out of your pocket.

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First Refusal: Sale of Buyer’s Property

If you need to sell your current home in order to finance the new one then this clause protects you from being on the hook for two mortgages. It gives you a window of time to sell your existing property before your new purchase becomes firm.

This clause is especially relevant in slower markets where homes may take longer to sell. It’s a safety net that prevents double financial obligations.

Appraisal

Though not used as frequently as the others, an appraisal clause is gaining popularity in hot markets. If your lender requires an appraisal that comes in lower than the purchase price, you’ll be responsible for covering the difference. This clause gives you the option to revisit or withdraw your offer if that happens.

In competitive markets, bidding wars can drive prices higher than the property’s appraised value. This clause protects you from overpaying beyond what your lender will support.

Final Thoughts

Understanding and including the right conditions on a house offer gives you leverage, protection and peace of mind, especially if you are a first-time buyer navigating a complex process. These clauses are not “deal killers”, they are “deal safeguards”. They give you the breathing room to do your due diligence and ensure you’re making the right investment.

As experienced Realtors in the Ottawa market, we always tailor conditions to your unique situation and the current market landscape. In a seller’s market, we may recommend strategies for making your offer competitive while still protecting your interests. In a buyer’s market, we’ll push for even more due diligence time.

Once an offer becomes firm (you have waived all of your conditions), there’s no turning back without consequences. So take the time to understand what you’re signing and work with a team that understands every clause inside and out. Let’s chat about how we can protect your investment from day one. We’re here to be your secret advantage in a challenging market.