Get a free, no obligation personal loan quote with rates as low as 9.99%
Get Started You can apply with no impact to your credit score

When you find a home you’d like to buy, your next step is to submit an offer to the seller. But an offer isn’t just a piece of paper with a number. Instead, it’s filled with all types of terms and legalities that you and the seller should fully understand before you sign it. 

Once the seller approves your offer, you’ll both sign off on it and the deal is sealed once all conditions are met. The question is, what’s involved in the process of making an offer on a house?

Key Points

  • Crunch the numbers to ensure you can comfortably afford a purchase before making an offer on a house. 
  • Your offer will include a handful of key components, including the offer price, deposit amount, possession date, and conditions.
  • You can strengthen your offer by offering a higher deposit, being flexible with the closing date, and limiting conditions.

How To Make An Offer On A House In Canada?

If you’d like to make an offer on a house, your real estate agent will help you fill out a purchase agreement with all the information listed above. Once signed by you, your agent will present the offer to the seller’s agent. Any amendments to the agreement must be signed off by you. 

Once both the buyer and seller sign off on the purchase agreement, both parties are legally bound to the contract. That means you’ll be legally required to follow through with your obligations as outlined in the agreement. 

That’s why it’s so important that you read through the agreement carefully and enlist the services of a professional and experienced real estate agent to ensure that you’re not signing anything that you can’t adhere to. As a buyer, you also have the opportunity to have a lawyer review the contract before the deal is sealed. 

What’s Included In A House Offer? 

Certain things are typically included in an offer, such as the following:

  • Offer price
  • Deposit amount
  • Closing date
  • Offer expiration date and time
  • Conditions (ie. financing or home inspection condition)
  • Chattels included (ie. property that is not attached to the home)
  • Equipment that is owned vs. rented
  • Number of buyer visits permitted before closing
  • Condition the home is to be left in
  • Property survey (if applicable)

Types Of House Offers

There are two different offers when buying a home: firm and conditional offers. 

Firm Offers 

An offer that has no conditions is referred to as a ‘firm’ offer. Once both buyer and seller sign the agreement of purchase and sale, the sale is final and the deal is sealed. 

When a buyer makes an offer void of conditions and the seller accepts the offer, the buyer cannot back out of the deal and is now legally required to follow through with the transaction.

Firm offers are common in competitive real estate markets where inventory is tight and buyers are plentiful. In a market like this, there are tons of buyers competing for the same homes. In this case, buyers must ensure that their offers are as attractive as possible to the seller. This often entails putting in a “clean” offer that’s void of conditions. Buyers should understand, however, that making a “clean” offer with no conditions may leave them vulnerable, as they will be forgoing the financing and inspection conditions. 

Conditional Offers

A conditional offer includes conditions. For the transaction to go through, these conditions must either be fulfilled or waived before their respective due dates. To be valid, all conditions must be met before the transfer of title to the property.

The sale is only complete after all conditions are met. If the conditions are met, the offer is considered “firm.” 

Should You Make A Firm Or Conditional Offer? 

Whether you should make a firm or conditional offer depends on your situation. 

When To Make A Firm Offer

In a multiple-offer situation, a firm offer can give a buyer an edge over other buyers. Sellers prefer firm offers because there’s little chance for the offer to fall through. Since no conditions must be fulfilled or waived — such as financing or home inspection conditions — there’s less risk of any issues that would otherwise arise from the presence of these conditions. 

When making an offer on a house with no conditions, buyers must ensure that they have the finances to afford the purchase and are prepared to accept any potential issues with the home that a home inspector might have identified before the deal closing. For this reason, the buyer is assuming more risk.

When To Make A Conditional Offer

Generally, it’s best to make a conditional offer, as it is meant to protect the buyer. For instance, a financing condition gives you time to secure a mortgage before committing to the sale. If you can’t get final mortgage approval after putting in an offer, you can back out of the deal without being subject to any consequences in most cases. 

In the same way, a home inspection condition gives you some time to have the home inspected by a professional. If any significant issues are uncovered that you’re not comfortable with, you can walk away from the deal without repercussion.

When Can You Make An Offer On A House?

Under normal circumstances, you can put in an offer on a home at any time after it has been listed for sale. In other situations, sellers may establish a specific offer date in anticipation of multiple offers coming simultaneously and hoping to increase the price. During this time, the seller can pick which offer to accept. 

Ultimately, your offer’s submission depends on how the seller handles them.

How To Negotiate A House Offer? 

When you put in an offer on a home, you’re free to do some negotiating to keep the price as low as possible while ensuring the offer price is fair. 

Your negotiating power will be influenced by current housing market conditions. For instance, if it’s a seller’s market — which is characterized by low inventory and high demand among buyers — you won’t have as much power. On the other hand, in a buyer’s market — which means there are plenty of houses to go around to meet slow demand — you’ll have the upper hand. 

Keep in mind that the offer price is not the only thing that can be negotiated in an offer. Other factors can be negotiated with the seller, including the deposit amount, closing date, repairs, and so forth. 

Learn how to make a preemptive bully offer

How Long Do Sellers Have To Respond To My Offer?

It’s common to include an expiry date on your offer. Generally speaking, offers expire within 24 to 48 hours after the offer is made. Once you draft up an offer and sign it, your agent will deliver it to the seller’s agent. 

If the seller does not respond to your offer within this time frame, the offer is considered expired and is automatically withdrawn. Including an expiry date on an offer helps create a sense of immediacy and encourages the seller to respond in a timely fashion. 

What Can I Expect From The Seller After I Make An Offer?

When you submit an offer, any one of the following can happen:

  • Seller accepts your offer. In the best-case scenario, the seller will accept your offer as is. If there are conditions included in the offer, they’ll need to be fulfilled or waived before their expiry dates. Once these conditions have been met, the sale is final and you and the seller are legally bound to the contract.
  • Seller counters your offer. It’s common for a seller to counter an initial offer from a buyer. If you’re comfortable with what the seller is asking for or changing, accept the offer. Otherwise, you’re free to counter the offer yourself.
  • Seller rejects your offer. If the seller flat-out rejects your offer, you can either look elsewhere or submit a new offer. 
  • Seller ignores your offer. If the seller does not respond to your offer before the expiry date, then the offer is considered null and void. Like a rejected offer scenario, you can either submit a new offer or look at other homes. You can also request the seller’s agent to send you an “Offer Conveyance” form (Form 109 in Ontario), which will be signed by the seller. This form shows that the offer has actually been presented to the seller. At the end of the day, it’s the seller who makes the final call as to whether an offer should be rejected or accepted.

Do You Need A Home Deposit When Making An Offer On A House? 

Yes, a home deposit is an amount provided upfront to the seller when the house offer is made. After a house offer is accepted, you’ll need to pay the home deposit amount promised in your offer. 

It’s an act of good faith and reassures the seller that you are serious about following through with the deal. If you walk away from the deal, you risk forfeiting your deposit. 

The deposit amount goes towards the down payment at closing. The money is held in an account with the listing brokerage until the funds are released when the transaction goes through.

How Much Is A Home Deposit? 

Generally, at least 5% of the house price is offered as a deposit, particularly in major cities. That said, smaller towns allow much smaller deposits. Further, 

However, depending on the market and where you’re buying the home, you may want to offer a larger deposit. This can help you stand out from other buyers. This is particularly true if you’re in the midst of a bidding war. 

How Can I Make My Offer On A House Stand Out?

In a seller’s market where demand is higher than the supply available, seller’s have the upper hand. In many cases, homes listed for sale get multiple offers, which means buyers are competing with others for the same house. 

If you find yourself in this situation, you need to make your offer stand out from the crowd to grab the seller’s attention. Here are a few tips for making a competitive offer:

1. Get Pre-Approved

You should be getting pre-approved for a mortgage no matter what the climate of the housing market is like. In a competitive housing market, having a pre-approval letter in hand will show sellers that you’re a serious and qualified buyer. Moreover, it will help you determine how much house you can afford and will help get the mortgage approval process moving along more seamlessly once you find a home you want to buy. 

2. Make Your Highest Offer

Many buyers offer a price that’s a few dollars shy of the maximum they’re willing to spend to make room for some back-and-forth negotiating. But if you’re concerned about other prospective buyers vying for the same property, it may be best to make your highest offer right out of the gate to get the seller’s attention. 

3. Offer A High Deposit Amount

A deposit is a typical component of making an offer on a house. But you can use your deposit as a way to make your offer more attractive. Offering more money upfront is another way to show the seller that you have your finances in order and are financially strong enough to get a mortgage to buy the home. Plus, a bigger deposit means a bigger financial commitment to buying the home.  

4. Be Flexible With The Closing Date

Sometimes the closing date is a big deal for sellers. They may already have another home purchase that’s closing on a specific date and want the closing date on their current home to coincide. If possible, try to be flexible with the closing date and agree to the date the seller requests. 

5. Limit The Number Of Conditions

Conditions are meant to protect you as a buyer. But when you’re involved in a bidding war, you may want to consider limiting the number of conditions you include in your offer. This can be a delicate issue, as you don’t want to leave yourself too exposed with a bare-bones offer. Be sure to consult with your real estate agent before deciding which conditions to include and which ones to exclude.

6. Include A Personal Letter

Sometimes including a letter with your offer explaining to the seller why you want to buy their home can work wonders. To you, the house is just a house. But to the current owners, it’s their home that they hold an emotional attachment to. By explaining why you love the home, you could tilt the odds in your favour.  

Should I Wait To Sell My Current Home Before Making An Offer On Another Home?

The answer to this question depends on the situation and the temperature of the housing market. There’s no right or wrong answer. 

For example, if homes are selling very quickly and there’s little inventory to meet buyer demand, then it might be better to look for homes before listing your home for sale.

On the other hand, in a market where there is plenty of inventory and listings are taking a long time to sell, it might make more sense to list your property for sale first. That way you’re not stuck with two homes (and two mortgages). 

There is an option to include a “sale of property” condition in your offer, which means your offer is contingent on selling your existing property over a specific amount of time. If you can’t sell your home during that time, the deal is null and void and you’ll get your deposit back. Keep in mind that sellers don’t typically like these conditions and will often counter these types of offers.

Work with your real estate agent to create a sound plan that makes sense for your situation and the current market.

Can You Walk Away After Making An Offer On A House?

As long as you have conditions on your offer, you can back out of the deal without consequence. As mentioned, inserting conditions in your offer makes it “conditional,” which means you can walk away from the deal if you are unable or unwilling to fulfill the conditions. In this case, you can take your deposit money and walk away.

That said, you may also back out of the deal even after the sale goes firm, but you’ll likely risk losing your deposit money. You may also risk potential litigation from the seller. 

Bottom Line

Making an offer on a house is a big decision, so you’ll want to ensure you’ve covered everything and considered all aspects before submitting one. Be sure to team up with a seasoned real estate agent to help you draft up a solid offer that will make you stand out against other buyers while protecting you at the same time.

Home Offer FAQs

When is home insurance due?

Your lender will require you to purchase a home insurance policy when you apply for a mortgage. Not only will this protect the lender, but it will also provide you with coverage before you move into your new home.

Do you need title insurance?

Title insurance is not mandatory, but many lenders require it. This type of insurance will protect you against any risks associated with the title of the property, such as liens that may exist or the unlawful sale of the home by someone who is not actually the owner.

Are there any government programs to help me purchase a house? 

Yes, there are several programs offered by the government to help Canadians buy a house. This includes the Home Accessibility Tax Credit (HATC), the First-Time Homebuyer Tax Credit (HBTC), and the GST/HST New Housing Rebate. 

How much liquid cash should I have when making an offer on a home? 

You’ll need to come up with a few thousand dollars for your deposit and to cover all closing costs on closing day. Your deposit money will need to be available within 24 hours after your offer is accepted, so make sure whatever deposit amount you offer is available in cash. Closing costs will run between 1.5 to 4% of the purchase price, so you’ll need to have access to this money before you get the keys to your new home.
Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2021/06/Mortgage-Stress-Test-Updates.png
Uninsured Mortgages Explained: OSFI Stress Test Changes and What They Mean for You

By Sean Cooper
Published on December 5, 2024

Due to the effects of COVID-19, OSFI has announced that it will be making some changes to the mortgage stress test for uninsured mortgages.

https://loanscanada.ca/wp-content/uploads/2024/11/Buying-A-Second-Home-And-Renting-Out-The-First-In-Canada.png
Rules For Buying A Second Home And Renting Out The First In Canada

By Lisa Rennie

Learn the rules for buying a second home and renting out the first in Canada, and how each type of property is treated.

https://loanscanada.ca/wp-content/uploads/2024/11/how-to-buy-a-house.png
How To Buy A House In Canada: A Step-by-Step Guide

By Lisa Rennie

Buying a house is a complex process. We've broken down each step so you know exactly what's to come when buying a house.

https://loanscanada.ca/wp-content/uploads/2024/11/Secondary-Suite-Incentive-Program.png
Boost Your Property Value: Secondary Suite Incentive Programs Across Canada

By Sean Cooper

Thinking of adding a basement suite to your home? Find out how you can cover your costs using the government secondary suite incentive programs.

https://loanscanada.ca/wp-content/uploads/2024/10/HOME-STAGING.png
Benefits Of Home Staging In Canada

By Jessica Martel

Thinking about staging your home? Find out how staging a home can result in a faster sale and an increased purchase price.

https://loanscanada.ca/wp-content/uploads/2024/10/House-flipping.png
House Flipping Tax Rules In Canada

By Sandra MacGregor

Find out how viable house flipping is to generate income given the new anti house flipping tax rules in Canada.

https://loanscanada.ca/wp-content/uploads/2024/10/home-equity-emergency-fund.png
Should You Use Home Equity As An Emergency Fund?

By Lisa Rennie

If you have a financial emergency would tapping into your home equity be a good idea? Find out if a HELOC or home equity loan in a good option.

https://loanscanada.ca/wp-content/uploads/2015/10/How-to-shop-for-a-mortgage.png
How To Successfully Shop For A Mortgage

By Caitlin Wood, BA

Click through to read our three step guide and learn how to successfully shop for and get your mortgage approved.

Recognized As One Of Canada's Top Growing Companies

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card