A firm offer in Ontario real estate is an Agreement of Purchase and Sale that contains no conditions. Once the seller accepts a firm offer, the buyer is legally bound to complete the purchase with no built-in way to exit the contract.
In a conditional offer, the buyer includes clauses that must be satisfied before the deal becomes binding, such as arranging financing, completing a home inspection, or reviewing a status certificate. A firm offer skips all of that. In a conditional offer the deal depends on certain requirements being met, while in a firm offer no conditions are attached, meaning the buyer is fully committed upon acceptance. The standard OREA Form 100 used across Ontario even includes a pre-printed acknowledgment that the buyer has had the opportunity to include conditions and has chosen not to.
Clause 13 of the OREA Form 100 states that the buyer acknowledges having had the opportunity to inspect the property and to include a requirement for a property inspection report, and agrees that, except as specifically provided for in the agreement, the buyer will not be obtaining one. This clause becomes especially significant in a firm offer because it confirms the buyer is proceeding without that protection.
Sellers generally prefer firm offers because they eliminate uncertainty. There is no conditional period during which the deal could collapse, and no need for an escape clause allowing the seller to entertain competing bids. For the buyer, a firm offer can be a strategic advantage in a multiple-offer situation because it signals commitment and reduces the seller's risk.
The trade-off is that the buyer assumes substantial risk. If mortgage approval falls short of the purchase price, the buyer is still legally obligated to close, even if they cannot secure the funds. Backing out of a firm offer in Ontario comes with consequences. The first is usually losing the deposit, but if the seller later resells the home at a lower price or incurs extra costs, they can sue for the difference, because under contract law the seller is entitled to be put back in the position they would have been in had the deal closed.
Before submitting a firm offer, buyers should have a mortgage pre-approval that accounts for the specific property, confidence in the home's condition, and a clear understanding of what they are giving up by waiving conditions. A firm offer is not inherently reckless, but it requires thorough preparation before an offer is written rather than after. To understand the alternative approach, read What Is a Conditional Offer in Ontario Real Estate?