Buyer's guide
How an offer works in Ontario
An offer is just a few pages, but every line is doing a job. Here is a marked-up example you can click through, what each part means in plain English, and a full walkthrough from first offer to a firm deal.
By Spiro Vrysellas, Broker, Vrysellas Team, Elevate Realty Inc., Brokerage.
What you will learn
Tap any section to jump to it. If you are buying soon, read it once now, so the real thing feels familiar when it lands in your inbox.
- 1What an offer is
- 2The offer, marked up
- 3Every part explained
- 4Sign backs and going firm
- 5Example walkthrough
- 6Before you sign
- 7Common questions
- +The full buying plan
The basicsWhat an offer actually is
An offer is a written proposal to buy a specific home, at a specific price, on specific terms. In Ontario, residential offers are almost always written on a standard form called the OREA Agreement of Purchase and Sale, published by the Ontario Real Estate Association. Your agent fills it in with you, and your real estate lawyer handles the legal side once it is accepted.
The key idea: an offer is not a wish list. Once the seller accepts it, it becomes a binding contract. So every blank, every date and every clause matters.
A legal agreement that sets the price, deposit, dates, conditions and what stays with the home.
A casual "let's talk" note. If it is accepted as written, you are expected to follow through.
Good to know: the example below is a simplified illustration we made for teaching. It is not the official OREA form and does not use its wording. Your agent and lawyer will guide you through the real one, line by line.
The offer, marked up
Click any orange number to jump to its explanation. Everything is fictional, from the names to the address.
Lot about 18 ft by 120 ft.Legal description: Part of Lot 0, Plan 0000 (from the land registry)2
Home inspection: 5 business days after acceptance6
Excluded: dining room chandelier7
Seller: accepts, or changes and initials (a sign back)13
Illustration only. Names, address and numbers are fictional.
Part by partEvery numbered part, explained
Here is what each marked part means and why it matters to you as the buyer.
The full legal names of everyone buying and everyone selling. If two of you are buying, both names go here, and both sign.
Your lawyer will later decide with you how you hold title together, so ask them before closing.
The street address plus the official legal description from the land registry. The address is how people find the home. The legal description is how the law identifies exactly which piece of land you are buying.
What you are offering to pay, written in numbers and words so there is no confusion. This is the number most people focus on, but as you will see, it is only one of many terms that make an offer strong.
Money you send to show you are serious. In Toronto it is commonly about 5% of the price. It is usually due within 24 hours of acceptance, and sometimes it goes in with the offer itself.
It is held in trust by the listing brokerage until closing, then counts toward your down payment. It is not an extra cost.
How long the seller has to respond. Until that moment, you generally cannot pull your offer back. If the seller does not accept by then, the offer simply expires.
Short deadlines (a few hours) put gentle pressure on the seller. Long ones give them time to shop your offer around.
Your safety nets. Each one gives you a set time to check something before you are fully committed:
Financing: your lender approves a mortgage on this home. Inspection: you are happy with a home inspection. Status certificate (condos): your lawyer reviews the condo corporation's finances, rules and any special assessments. Sale of your home: you need to sell first. Sellers often accept this one only with an escape clause that lets them keep marketing.
Miss a deadline without waiving and the deal usually ends, with the deposit returned. Your agent will confirm the exact wording.
Chattels are things that can be moved, like the fridge or washer. They only stay if the offer lists them.
Fixtures are things attached to the home, like light fixtures or built-in shelves. They normally stay unless the offer excludes them. Love that chandelier? Make sure it is not on the excluded list.
Some equipment in a home is rented, not owned. The hot water heater is the classic example, and furnaces, air conditioners and water softeners can be too. The offer lists them, and you agree to take over the rental contract.
Ask for the monthly cost and the contract terms before you sign, so there are no surprises on your first bill.
Before closing, your lawyer searches the title to confirm the seller really owns the home and that there are no surprises, such as an unpaid debt registered against it. The requisition date is the deadline for your lawyer to raise any issues. You do not need to do this yourself. Your lawyer handles it.
The day the home legally becomes yours and you get the keys. In Toronto it is often 30 to 90 days after acceptance. Pick a weekday that works with your lease, your move and your lawyer.
Offering the closing date the seller prefers is an easy way to make your offer more attractive.
For a typical resale home that someone has lived in, HST generally does not apply. The offer usually says the price includes HST if any applies, which protects you from a surprise bill.
New builds, substantially renovated homes and some commercial or mixed-use properties can be different. Ask your lawyer if you are not sure.
Pages attached to the offer for anything custom: deposit instructions, the exact wording of your conditions and any special agreements, like the seller fixing a broken window before closing. They are part of the contract, so read them as carefully as the main pages.
You sign the offer, usually electronically, and it goes to the seller. The seller can accept it as is, let it expire, or change something (like the price or closing date), initial the change and send it back. That is a sign back, a counter offer.
A sign back replaces your original offer. Now it is your turn to accept, sign back again or walk away.
A short line recording the exact date and time the final version was accepted by everyone. It matters more than it looks: the deposit deadline and condition deadlines often count from this moment.
From offer to firmSign backs, conditions and going firm
Most offers do not get accepted exactly as written the first time. Here is the usual path from first offer to a deal that is fully locked in:
- OfferYou sign and send
- Sign backSeller counters
- AcceptedBoth agree
- DepositSent on time
- ConditionsChecked and waived
- FirmDeal locked in
Accepted, but you still have conditions to satisfy, such as financing or inspection. If one is not met by its deadline, you can usually walk away with your deposit back.
No conditions left. Either the offer had none, or you signed a waiver removing them. From here you are committed to buy on the closing date.
"Firm" is the word everyone waits for. It means the deal is happening. If a buyer fails to close a firm deal, they can lose their deposit and be responsible for the seller's losses, which is why you only waive conditions once everything truly checks out.
Pro tip: on an offer date, most buyers compete without conditions. That only works safely if you are pre-approved, have the deposit ready and inspected before the offer date. Our step-by-step buying plan shows how to get there.
Sam and Leah make an offer on a semi near Corso Italia
A regular negotiation with no offer date, from first offer to firm deal.
- Day 0, 6 p.m.: The semi is listed at $1,199,000 and the seller will look at offers any time. Sam and Leah offer $1,140,000 with a 5% deposit, financing and inspection conditions (5 business days each), a 60-day closing and an irrevocable time of 11:59 p.m.
- Day 0, 10 p.m.: The seller signs back at $1,175,000, with everything else unchanged and an irrevocable time of noon the next day.
- Day 1, 10 a.m.: Sam and Leah sign back at $1,160,000. That is still inside the budget they set with their mortgage broker.
- Day 1, 2:10 p.m.: The seller accepts. The confirmation of acceptance is filled in, and the clock starts on the deposit and conditions.
- Day 2: They deliver the $58,000 deposit to the listing brokerage, well within 24 hours.
- Day 4: Home inspection. A few small items, like a loose handrail and an older furnace with life left in it. Nothing that changes their mind.
- Day 6: Their lender approves the mortgage. They sign a waiver removing both conditions. The deal is firm.
- Day 61: Closing day. Their lawyer registers the home in their names and they get the keys.
| Their numbers | Amount |
|---|---|
| List price | $1,199,000 |
| Their first offer | $1,140,000 |
| Seller's sign back | $1,175,000 |
| Their sign back, accepted | $1,160,000 |
| Deposit within 24 hours (5%) | $58,000 |
| Rest of the down payment on closing (15%) | $174,000 |
| Total down payment (20%) | $232,000 |
| Mortgage (80%) | $928,000 |
Example only. Sam and Leah are not real clients. Closing costs such as land transfer tax and legal fees are extra, so run your own numbers in the closing costs calculator. With less than 20% down, other options exist, so talk to a trusted mortgage broker.
Watch out: condition deadlines are often counted in business days from acceptance, not from when you first sent the offer. Put every deadline in your calendar the moment the deal is accepted.
Your checklistBefore you sign anything
Go through this list with your agent before your signature goes on the page:
- You have a written pre-approval, and you know your comfortable budget, not just your maximum
- Your deposit is sitting in your account, ready to send by bank draft or wire
- You have read every page, including every schedule, and asked about anything unclear
- The included and excluded items match what you expect to find on closing day
- You know about any rental items and what they cost each month
- The closing date works with your lease, your move and your lender
- You have a real estate lawyer lined up and their details are ready
- Every condition deadline is in your calendar
Pro tip: ask your agent for a blank sample offer a week before you start touring. Reading it with no pressure is the best way to make offer night feel calm.
Frequently asked questions
Can I back out after my offer is accepted?
Only in the ways the agreement allows. If you have conditions, such as financing or inspection, you can usually walk away if a condition is not satisfied by its deadline. Once the deal is firm, backing out can cost you your deposit and more. Talk to your lawyer right away if something goes wrong.
Who holds my deposit?
Usually the listing brokerage, in a trust account. It stays there until closing, when it is credited toward your down payment.
What is the difference between a sign back and a counter offer?
They are the same thing. When the seller changes your offer, initials the change and sends it back, that is a sign back, or counter offer. It replaces your original offer, and you can accept it, sign back again or let it expire.
Do I pay HST when I buy a resale home?
For a typical resale home that has been lived in, HST generally does not apply. New builds, substantially renovated homes and some other properties can be different, so ask your lawyer if you are unsure.
Is the offer I sign the same as the illustration on this page?
No. The illustration is simplified for teaching. In Ontario, the official form is the OREA Agreement of Purchase and Sale, and your agent and lawyer will guide you through every part of it.
Keep learning
How to buy a home in Toronto, step by step How much mortgage can I qualify for? How much cash do I need to close? All Toronto real estate guidesExample figures are for illustration only. The offer shown is a simplified teaching illustration, not the OREA Agreement of Purchase and Sale. Rules and standard forms change, so confirm details with your agent and real estate lawyer. This is not financial or legal advice.