In Ottawa’s fast-paced real estate market, it’s easy to feel the pressure to act quickly, especially when homes are receiving multiple offers and bidding wars are common. As a buyer, you may be tempted to submit a “clean” offer without any conditions, thinking it will give you the edge. But before you waive the financing clause, it’s critical to understand the risks.
Even if you’ve been pre-approved for a mortgage, that doesn’t guarantee final approval. In today’s environment, where lending guidelines can be strict and interest rates are fluctuating, removing the financing condition from your offer can expose you to serious financial and legal consequences.
Why Is the Financing Condition So Important?
1. Appraisals Don’t Always Match Offer Prices
One of the most common issues we’re seeing is that appraisals are coming in lower than the agreed-upon purchase price. If that happens, your lender will only approve a mortgage based on the appraised value — not what you offered. That means you could be left scrambling to come up with the difference in cash, or risk losing the home altogether.
2. Pre-Approval Doesn’t Equal Final Approval
A mortgage pre-approval is based on a preliminary review of your financials, but things can change. A deeper dive during the actual approval process may reveal issues that impact your qualification. A sudden job change, new debt, or shifts in your financial profile can derail final approval, even if you were previously pre-approved.
3. You Could Be Approved for Less Than You Expected
Sometimes buyers discover — only after the offer is accepted — that their lender won’t approve them for the full purchase price. If there’s no financing condition, you’re still legally obligated to close the deal. That could mean finding additional funds last minute or risking your deposit.
4. Legal and Financial Liability
Waiving your financing condition means you’re making a legally binding commitment to buy the property. If you can’t close due to lack of financing, the seller may keep your deposit or even take legal action against you. It’s a risk that can have long-lasting financial repercussions.
How to Protect Yourself
While a no-conditions offer might seem like the only way to win in a bidding war, it’s not always the safest route. A quick conversation with a mortgage broker ahead of submitting your offer can make all the difference. They can help assess whether it’s truly safe to waive your financing condition, or whether it should absolutely stay in.
As your Ottawa real estate partner, I work closely with trusted mortgage professionals to help you navigate these decisions with clarity and confidence. Our goal is to remove as many unwanted surprises as possible — before you’re locked into a purchase.
Final Thoughts
The dream of homeownership shouldn’t come with the nightmare of unexpected costs or legal trouble. In a competitive market, it’s easy to get caught up in the urgency, but your long-term financial security is more important than winning a bidding war at any cost.
If you’re thinking of submitting an offer, or you have questions about including financing conditions, let’s chat. Together, we’ll ensure you’re making smart, informed decisions every step of the way.
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