The Canadian real estate landscape has transformed dramatically since 2022. Housing markets have returned to balance and conditional offers have resumed, marking a significant shift from the frenzied seller's market where buyers often waived conditions just to compete.
This return to normalcy brings both opportunities and responsibilities. Whether you're making or receiving an offer to buy a property in 2025, understanding every clause, condition, and change has become absolutely critical to protecting your interests.
The New Reality of Real Estate Offers
2024 stands out as a year with a significant number of real estate policy changes in Canada. New mortgage rules took effect in December 2024, allowing first-time buyers to secure mortgages with 30-year amortization terms and insured limits up to $2 million for properties with up to four units. These changes mean offer terms are becoming more complex as buyers navigate new financing options.
The Bank of Canada's policy rate, which stood at 5% in early June 2024, was reduced to 3.25% by year's end, making financing more accessible but also creating new variables in how offers are structured and negotiated.
Essential Conditions You Need to Understand
Financing Conditions Are Back
A financing condition affords the buyer additional time to secure financing for the purchase of the residential property. Even with pre-approval, being preapproved or prequalified still does not mean that one can leave the financing condition out of the purchase contract.
Why this matters now: If the financial situation of the buyer changes after the initial preapproval, the lender can still reject the financing. Examples that may change are interest rates, job or salary changes, reduced credit scores, or, perhaps, the buyer forgetting to declare a debt during the preapproval process.
Home Inspection Conditions
The home inspection has returned, which has been music to the ears of every home inspection professional. This condition allows buyers to have the property professionally inspected and provides several options if issues are discovered.
If the home inspection comes back negative, the offer can become null and void. Alternatively, you can negotiate repairs or price adjustments based on the findings.
Sale of Existing Property
For buyers who are in the process of selling their existing property, this is one of the most common conditions on a real estate offer. This condition protects buyers who need to sell before they can purchase.
Additional Conditions to Consider
Modern offers may include several other protective conditions:
Status Certificate Review (for condominiums): A status certificate is a document that contains essential information about the unit and the financial situation of the condo corporation
Legal Review: Ensuring your lawyer can review all terms
Rental Property Considerations: If the property has a rental unit, there will be a condition on whether to assume the tenants or to evict them
Repair Conditions: There could be some damages in the home that you'd like fixed before you move in
The Stakes Are Higher Than Ever
The legal landscape surrounding real estate transactions continues to evolve. The Competition Bureau has obtained a court order to advance its investigation into potential anti-competitive conduct by the Canadian Real Estate Association (CREA) related to rules about real estate commissions, indicating ongoing scrutiny of industry practices.
Recent class-action lawsuits across Canada are challenging traditional commission structures, with settlements that could pave the way for a clear path forward for the RE/MAX brand, its franchisees and their sales associates, removing the uncertainty of ongoing litigation.
New Protections for Buyers
Some provinces have implemented additional buyer protections. British Columbia provides buyers with an opportunity to rescind their offer to purchase residential properties up to three days after an offer is accepted, though this comes with a cost of 0.25% of the offer price.
Market Changes During Negotiations
In an offer, a buyer will include a time frame for their condition(s) to be satisfied. If they're not satisfied by the end date, the deal becomes null and void unless both parties agree to extend the timeframe.
Understanding timing is crucial because home sales surged by approximately 10%, totalling around 490,376 units—a clear indication of renewed buyer confidence and cautious optimism in the market. This increased activity means sellers have more options, making well-structured offers more important than ever.
Why Professional Guidance Matters More Now
The complexity of today's real estate transactions demands expert navigation. Walking away from a signed purchase agreement without just cause can come with serious consequences, including loss of your home deposit and litigation.
For a majority of Canadians, buying a home will be the biggest purchase they ever make. And unlike many purchases you make, there is no 30-day return policy or buyer satisfaction guarantee.
Protecting Yourself in Today's Market
Recent market shifts mean buyers need to be more strategic than ever. In a buyer's market, the buyer has a bit more leverage, so they can add these protective contingencies and aren't likely to result in a bid being refused during a bidding war.
However, each situation is unique. The conditions you include in your offer will vary depending on your situation, but with the help of a REALTOR® you can make sure you include the ones that make the most sense for you.
The Bottom Line
With home sales expected to grow by 6% in the first half of 2025, before moderating to 1.3% in the second half, the market remains active but more balanced than in recent years.
This creates the perfect environment for thoughtful, well-structured offers. Unlike the rush of the pandemic-era market, you now have the opportunity to include appropriate conditions and take time to understand exactly what you're agreeing to.
Don't let the complexity intimidate you, but don't underestimate its importance either. Every clause in your offer exists for a reason, and understanding each one could save you from costly surprises down the road.
Ready to navigate today's real estate market with confidence? Contact our experienced team at Bermont Realty to ensure your next offer is structured to protect your interests while positioning you for success in this evolving market.