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Firm Offer

Find out what a firm offer is in Canadian real estate, how it differs from a conditional offer, and why it carries both competitive advantages and financial risks.

Firm Offer
Escrow – Definition, Meaning, and Examples in Canadian Real Estate

May 22, 2025


What is a Firm Offer?

A firm offer is a legally binding agreement to purchase a property that contains no conditions. Once accepted, it commits both the buyer and the seller to complete the transaction.

Why Firm Offers in Real Estate

In Canadian real estate, a firm offer signals the highest level of buyer commitment. Unlike conditional offers, which allow the buyer to back out if certain terms aren’t met, a firm offer has no escape clauses. This makes it highly attractive to sellers, especially in competitive markets where multiple bids are common.

Submitting a firm offer can give a buyer a strategic advantage – often beating out higher conditional offers. However, it carries more risk. The buyer is obligated to close regardless of financing, inspections, or unforeseen issues. If they fail to close, they may forfeit their deposit and face legal consequences.

Buyers considering a firm offer should only do so when they are pre-approved for financing, confident in the property’s condition, and financially prepared to complete the purchase. Legal and real estate professionals should be consulted to understand the implications before waiving standard protections.

Understanding firm offers helps buyers evaluate risk, craft strong negotiations, and compete in fast-paced markets without compromising their financial security.

Example of a Firm Offer

In a heated bidding war, a buyer submits a firm offer of $1 million for a detached home in Mississauga. The seller accepts, and the buyer is legally bound to close the deal.

Key Takeaways

  • A binding, unconditional agreement to purchase a property.
  • Favoured by sellers due to guaranteed commitment.
  • Poses greater risk to buyers if financing or issues arise.
  • Often used in bidding wars to stand out.
  • Should only be made with legal and financial certainty.

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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