Buyer’s Guide

Common Home Buying
Mistakes in Ontario

Ontario’s real estate system has unique rules that trip up even experienced buyers. Here’s what you need to know before you sign anything.

Why Ontario is Different

During competitive markets, buyers are pressured to submit “clean” offers — removing financing, inspection, and status certificate conditions to be more attractive. While this can be a valid strategy, too many buyers do it without fully understanding what they’re giving up.

Waiving the financing condition means if your mortgage falls through after the offer is accepted, you could lose your deposit — or be sued for the difference if the seller re-lists at a lower price.

Waiving home inspection means buying the property “as-is” — with no recourse if you later discover a failing furnace, hidden water damage, or a roof that needs $20,000 in repairs.

Better approach: If you must waive inspection, arrange a pre-offer inspection beforehand (costs ~$500–600). Get a mortgage pre-approval — not just pre-qualification — before writing any offer.

Ontario has a distinctive offer process that confuses many buyers, especially those from other provinces or countries. Two key concepts:

Offer Night / Hold-Back Strategy: Sellers set a date to review all offers simultaneously, creating a bidding war. A home listed at $899,000 might receive 8 offers and sell for $1,100,000+. The listing price is not the market price — it’s a marketing tool.

Bully Offers (Pre-emptive Offers): A buyer can submit an offer before the offer date, often significantly above asking. The seller can accept or decline. If you don’t know this is happening, you could lose a property you thought you had more time to consider.

Your agent should always check whether the seller is holding offers and alert you to any bully offer activity in the listing.

If you’re buying a brand-new home or a pre-construction condo, HST (13%) applies to the purchase price. On a $700,000 new condo, that’s $91,000 in tax — a number that can completely derail your budget if you didn’t plan for it.

The good news: there are rebate programs. The New Housing HST Rebate can return up to approximately $30,000 for owner-occupied purchases. However:

• The rebate rules differ for investors vs. owner-occupants
• Assignment sales (flipping a pre-construction contract) have complex HST implications
• Builder contracts sometimes show prices as “HST included” — but that inclusion assumes you qualify for the rebate. If you don’t, you’ll owe the difference.

Always consult a real estate lawyer before signing a new build contract. Don’t rely on the builder’s sales rep to explain your tax liability.

New Build HST: What Actually Happens

The Agreement of Purchase and Sale (APS) is the legally binding contract that governs your transaction. Most buyers skim it or skip it entirely, trusting their agent to “handle it.” That’s a mistake.

Pay special attention to Schedule B (Additional Terms) — this is where sellers’ agents insert clauses that protect the seller at your expense:

• “As Is, Where Is” — seller disclaims responsibility for defects
• Appliances and equipment sold without warranty of working condition
• Limitations on your final walk-through rights before closing
• Clauses that allow the seller to substitute or remove certain fixtures

These clauses are enforceable once signed. Your buyer’s agent should flag every non-standard term, and your lawyer should review the full agreement before you waive conditions.

This is perhaps the most common and costly mistake: contacting the listing agent directly to submit your offer, thinking it’s simpler. In Ontario, this creates a multiple representation situation (formerly called dual agency).

The listing agent’s legal obligation is to the seller. They are duty-bound to help the seller get the highest price. When you ask the same agent to “represent” you, they must disclose this conflict — but the fundamental problem remains: they cannot fully advocate for you while also advocating for the seller.

The common misconception: “I’ll get a better deal because the agent earns both sides of the commission.” In practice, I’ve seen the opposite — buyers who used the listing agent often overpaid by $20,000–$40,000 and had fewer protections in their agreement.

Key fact: Your buyer’s agent commission is paid by the seller — not you. Getting proper, independent representation costs you nothing extra.

In Ontario, once an offer is accepted, the deposit is legally committed. If you walk away without a valid contractual reason (a condition that wasn’t met), you don’t just lose your deposit — the seller can sue you for additional damages, including any loss from re-listing at a lower price.

Typical deposits run 5% of the purchase price. On a $900,000 home, that’s $45,000 at risk — and potentially more.

When can you legally exit and recover your deposit?
• Financing condition not met (mortgage was denied or insufficient)
• Home inspection revealed unacceptable issues (and the condition is in your offer)
• Status certificate review condition (for condos)

Without conditions in your offer, you have very little legal protection if you change your mind.

In Ontario, a real estate lawyer is required to close a transaction. But many buyers only engage their lawyer at the very end — when it’s too late to catch problems.

A good real estate lawyer (fees typically $1,500–$2,000 all-in) provides:

• Title search — confirming no liens, encumbrances, or ownership disputes
• Zoning verification — ensuring the property’s permitted uses match your plans
• Review of any unusual contract clauses before you waive conditions
• HST rebate applications for new builds
• Coordination of funds and title transfer at closing

One buyer I know skipped early legal review on a resale home. After closing, they discovered an unpermitted basement renovation. Legalizing it cost over $35,000. The lawyer’s fee would have identified the problem from permit records during the condition period.

Before You Write an Offer — Checklist

✅ Get a mortgage pre-approval (not just pre-qualification)
✅ Understand the local offer strategy — is this an under-priced hold-back or an over-priced listing?
✅ Arrange a pre-offer inspection if you plan to waive the inspection condition
✅ For new builds: confirm HST exposure and rebate eligibility with a lawyer
✅ Read Schedule B — every clause, not just the main body of the APS
✅ Work with an independent buyer’s agent, not the listing agent
✅ Know your deposit amount and what conditions protect it
✅ Engage your lawyer early, not just at closing

Ready to Buy Smart in Ontario?

I offer free buyer consultations. Let’s walk through your situation before you write a single offer.

📞 416-888-6161

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