Firm Offer

A firm offer is an offer to purchase a property that contains no conditions and cannot be withdrawn once it is accepted. In Canadian real estate it is also called an unconditional offer, and it is the opposite of a conditional offer.

Every purchase begins with an Agreement of Purchase and Sale, the contract that sets the price, the completion date, and the possession date. In a conditional offer, the buyer adds subjects — most commonly financing approval, a satisfactory home inspection, and the sale of the buyer's existing home. A firm offer removes those subjects entirely, leaving price and dates as the only negotiated terms.

Conditional versus firm offers

Conditional offer: the buyer can walk away, and usually recover the deposit, if a stated condition is not satisfied by a deadline.
Firm offer: none of those escape hatches exist. If financing falls through, the appraisal comes in low, or the inspection reveals problems, the buyer is still bound and the deposit is generally at risk.

A firm offer is irrevocable for the period stated in the contract. Once the seller accepts, both sides are committed, and the buyer cannot change their mind simply because a lender says no.

Why firm offers matter to borrowers

Sellers in competitive markets often prefer firm offers because the deal is far less likely to collapse. That appeal carries real risk for the buyer. Before submitting one, a buyer should hold a pre-approval and understand that a pre-approval is not a guarantee of funding — final approval depends on underwriting, an appraisal of the property, and verification of income, down payment, and credit.

Buyers using a high-ratio mortgage, meaning a down payment below twenty per cent, should also remember that the loan must be insurable by CMHC, Sagen, or Canada Guaranty, and that federally regulated lenders must apply the federal mortgage stress test. A property that fails the appraisal, or a borrower who fails the stress test, can leave an unconditional buyer scrambling for a private lender, a co-signer, or extra cash.

Before going firm

Confirm the lender has reviewed the specific property and issued a mortgage commitment, not just a pre-approval.
Arrange the home inspection in advance, even though the offer itself carries no inspection condition.
Have the deposit and closing funds ready; bridge financing may be needed if the buyer's own sale closes later.

A firm offer can be an effective negotiating tool, but it shifts the financing risk from the seller to the buyer. Buyers should confirm the current rules and their own lender's requirements before removing conditions.

Frequently asked questions

Can I withdraw a firm offer after the seller accepts?

Generally no. A firm offer is irrevocable once accepted, and the buyer is contractually bound. Walking away can mean losing the deposit and exposing the buyer to a claim for damages if the seller resells for less. The main exceptions are a breach by the seller, a mutual agreement to release, or terms written into the contract itself. Confirm wording with a real estate lawyer.

Is a firm offer the same as a cash offer?

No. A cash offer means the buyer does not need mortgage financing at all. A firm offer simply means no conditions are attached, so a buyer using a mortgage can still make one. A financed firm offer carries more risk, because funding must still be approved by the lender after the deal is binding.

Should I make a firm offer without a financing condition?

It depends on your risk tolerance, the market, and how solid your financing is. A full mortgage commitment, verified income and down payment, and a completed appraisal reduce the risk considerably. Without those in place, an unconditional offer can expose you to losing your deposit. General information only; speak with a mortgage professional.