What does it mean to waive financing on an offer?

Waiving financing means making your offer firm with no condition on getting mortgage approval. If your lender later declines the mortgage or appraises the property below the purchase price, you are still legally obligated to close. Your deposit is at risk if you cannot complete the transaction, and Ontario courts have also held defaulting buyers responsible for the seller's further losses, such as the shortfall when the home resells for less. Deposit amounts are negotiable and set in your offer; in the GTA, around 5 per cent of the purchase price is a common convention.

Why did buyers waive financing in 2021 and 2022?

In the seller's market of 2021 and 2022, many GTA listings drew multiple competing offers, and sellers often chose the cleanest offer, meaning the one with the fewest conditions. Price was sometimes a tiebreaker rather than the deciding factor. Waiving financing was the cost of being competitive. As of mid-2026, with buyers holding much more negotiating power, that tactical pressure has largely disappeared.

What if the appraisal comes in below my purchase price?

If you have a financing condition, an appraisal shortfall is a chance to renegotiate the price or walk away with your deposit returned. If you have waived financing and the appraisal is short, you must come up with the difference in cash, because the lender bases the mortgage on the lower of the appraised value and the purchase price. If you cannot close, you risk losing your deposit, and Ontario courts have held defaulting buyers liable for the seller's additional losses. Speak to your real estate lawyer before going firm without a financing condition.

For buyers · Advisory

Should You Waive Financing in 2026? A Buyer's-Market Reality Check

In a seller's market, waiving financing was a tactic. In the 2026 GTA market, it adds risk with no upside. Here's how to read the room.

6 min read

Jasmina Zivkovic

REALTOR®, RE/MAX Your Community Realty Inc.

A buyer I’m working with this month came to me with an offer she was ready to write on a midtown townhouse. She wanted to waive financing. She’d seen it work for friends in 2021 and remembered it as the move that wins deals.

I sat with her for an hour and walked through why this is the wrong move in 2026. Here is what we walked through together: what a financing condition actually does, why waiving it once made sense, and why today it only adds risk without adding strength.

What waiving financing actually means

A typical Ontario offer includes a financing condition: a clause that makes the agreement conditional on you arranging satisfactory mortgage financing within a set period, usually 5 to 10 business days. Your lender’s appraisal of the property happens as part of that approval. If the lender declines, or the financing you are offered is not acceptable, you can end the agreement and your deposit is returned.

To “waive financing” is to remove that clause. Your offer is now firm regardless of what your lender says about you or the property. If the lender later declines, or appraises the home below what you agreed to pay, you must close anyway. That means coming up with cash to cover the gap, or defaulting on the contract.

And default is not a small word. Your deposit is on the line first. Deposits in Ontario commonly run anywhere from 2 to 5 per cent of the purchase price; in the GTA, around 5 per cent is the common convention, and the exact amount is negotiable and set in your offer. The consequences can go further than the deposit. In Azzarello v. Shawqi, a buyer agreed to pay $1.55 million, could not get financing, and could not close. The sellers resold the home for about $275,000 less, and the Ontario Court of Appeal held the buyer responsible for that difference, with his deposit credited against the damages. Every situation is different, and this is exactly the conversation to have with your real estate lawyer before you sign anything firm.

Why it ever made sense

In 2021 and 2022, GTA listings routinely drew multiple competing offers. Sellers chose the cleanest offer, and the cleanest meant the fewest conditions. Buyers who left financing in their offer were often eliminated in the first pass. Waiving financing wasn’t a clever move; it was the price of admission.

This was a structural feature of an extreme seller’s market. The risk of waiving was real, but it was offset by the near certainty that your offer would otherwise lose. Buyers calculated that losing every deal was worse than accepting a small chance of serious trouble on the deal they won.

Why it doesn’t make sense now

As of May 2026, TRREB’s Market Watch reports the average GTA selling price at $1,069,700, down 4.6 per cent from a year earlier, with condo apartment prices down 6.4 per cent, and down 9.5 per cent in the 905 communities. By TRREB’s property-days-on-market measure, the average property spent 42 days on the market from first listing, about six weeks. In my York Region, REALTORS® recorded 1,183 sales against 3,323 new listings that month. Sales have picked up and new listings have thinned compared to last spring, so this is not a market standing still, but the balance of power has not flipped. But don’t take my word for it: TRREB’s own Chief Information Officer, Jason Mercer, said buyers “continued to have substantial negotiating power through the spring.”

The structural condition that made waiving financing rational has inverted. There is no longer a broad competitive penalty for keeping a financing condition in your offer. Most of the offers I have helped buyers write this spring faced little or no competition, and some sellers were open to longer condition periods. You can present a clean, well-prepared offer with the standard 5 to 10 business day condition and remain competitive. If you are shopping where I am, my guide to buying in Richmond Hill and York Region in 2026 walks through what this looks like street by street.

What is the upside of waiving, then? In a market where your offer can win with the condition in place, the only thing waiving accomplishes is exposing you to appraisal risk. That is not a tactic; it is taking on risk for free.

The appraisal-shortfall risk is real in 2026

Here is what most buyers don’t know: in a softening market, a lender’s appraisal can come in below the agreed purchase price. The lender does not care what you agreed to pay. The lender cares what the property is worth on the day they appraise it, and the mortgage is based on the lower of the appraised value and the purchase price.

If you have agreed to pay $750,000 for a condo that appraises at $715,000, your lender will only finance the mortgage based on the $715,000 value. You must bring the $35,000 difference in cash to closing, on top of your planned down payment. If you cannot, you are in breach of contract.

Why does this happen more when prices soften? Appraisers lean on recent comparable sales. In a rising market, those comparables tend to support the price you agreed to. In a softening one, the comparables may be months old and higher than what the same homes would fetch today. With condo apartment prices showing some of the steepest year-over-year declines in TRREB’s May 2026 data, condo purchases are where I watch this risk most carefully.

What to do instead

Three moves are available to a buyer in the 2026 market:

Keep the financing condition. Five to ten business days is plenty for a lender to underwrite and an appraiser to do their work. You are not being weak by leaving it in; you are being appropriately careful.
Get fully underwritten before you shop. This is different from a quick pre-approval. Ask your lender or broker for a full underwriting review of your documents up front, so the lender’s commitment is subject only to the property. When you go firm later, the financing condition becomes close to a formality. You’re competitive and protected.
Negotiate price down to the appraisal. If your offer is in the running and the appraisal comes in short, you have leverage to revisit the price before you firm up. In today’s market, many sellers are willing to revisit price to keep a serious deal alive. Use the structure of the market in your favour.

So what should you do with the 2021 playbook?

Leave it where it belongs. In real estate, tactics that worked in one market do not transfer to another. The 2021 playbook was written for a seller’s market, and carrying it into the 2026 market means taking on risk that buys you nothing. Waiving financing was never a clever move; it was a survival move in a market that no longer exists.

If you are about to write an offer in the GTA and someone has suggested waiving financing without explaining the appraisal-shortfall risk in plain words, ask for that explanation in writing. Read it. Then decide. This is one piece of a larger discipline: a financing condition is one line on the full pre-offer checklist I keep in what to check before making an offer on a home in Richmond Hill, alongside the rest of how to avoid buying the wrong home.

Most of the offers I write for buyers this year keep the financing condition in. Most of those offers are accepted. That is what a buyer’s market looks like.

Before you go firm on anything, ask yourself one question: what does waiving actually win you here? If you would like a second opinion on your offer before you sign, ask me, with no cost and no obligation.

Frequently asked questions

What does it mean to waive financing on an offer?: Waiving financing means making your offer firm with no condition on getting mortgage approval. If your lender later declines the mortgage or appraises the property below the purchase price, you are still legally obligated to close. Your deposit is at risk if you cannot complete the transaction, and Ontario courts have also held defaulting buyers responsible for the seller's further losses, such as the shortfall when the home resells for less. Deposit amounts are negotiable and set in your offer; in the GTA, around 5 per cent of the purchase price is a common convention.
Why did buyers waive financing in 2021 and 2022?: In the seller's market of 2021 and 2022, many GTA listings drew multiple competing offers, and sellers often chose the cleanest offer, meaning the one with the fewest conditions. Price was sometimes a tiebreaker rather than the deciding factor. Waiving financing was the cost of being competitive. As of mid-2026, with buyers holding much more negotiating power, that tactical pressure has largely disappeared.
What if the appraisal comes in below my purchase price?: If you have a financing condition, an appraisal shortfall is a chance to renegotiate the price or walk away with your deposit returned. If you have waived financing and the appraisal is short, you must come up with the difference in cash, because the lender bases the mortgage on the lower of the appraised value and the purchase price. If you cannot close, you risk losing your deposit, and Ontario courts have held defaulting buyers liable for the seller's additional losses. Speak to your real estate lawyer before going firm without a financing condition.