Buyer Risk
Understand buyer risk in Canadian real estate — what it includes, how it arises in firm offers, and how to protect yourself during property purchases.
May 22, 2025
What is Buyer Risk?
Buyer risk refers to the financial and legal risks that a purchaser assumes during a real estate transaction, particularly when making firm or condition-free offers.
Why does Buyer Risk Matter in Real Estate?
In Canadian real estate, buyers take on certain risks when submitting offers — especially in hot markets where firm offers (with no conditions) are common. If a buyer waives financing, inspection, or sale-of-home clauses, they may face consequences if something goes wrong.Buyer risk may include:
- Losing the deposit if financing falls through
- Being obligated to complete a purchase despite discovering issues
- Legal action if the buyer backs out of a firm agreement
Understanding buyer risk is essential for making informed, confident decisions when entering into legally binding real estate agreements.
Example of Buyer Risk in Action
A buyer makes a firm offer without a financing condition but fails to get final mortgage approval, putting their $50,000 deposit at risk.
Key Takeaways
- Refers to the legal and financial exposure buyers face.
- Increases with firm or condition-free offers.
- Can lead to deposit loss or legal action.
- Must be weighed carefully before submitting offers.
- Expert advice can reduce risk.
Related Terms
- Firm Offer
- Conditional Offer
- Deposit
- Financing Condition
- Real Estate Lawyer
