Anonymised, illustrative composite. The buyer had waived every condition in writing days earlier; when the financing behind that waiver fell through anyway, the deal was already firm, and firm does not come with an undo button.
At a glance
A buyer's offer on a Barrie-area resale home at $780,000 carried financing and home-inspection conditions. Both were waived in writing twelve days before the scheduled closing, making the agreement firm and binding on both sides.
Four days before closing, the buyer's lender withdrew its mortgage approval over a last-minute change in the buyer's employment. The buyer told the seller's agent they could no longer close and would not be proceeding. A financing condition protects the buyer only while it is still open; once it is waived — communicated in writing before the deadline — the agreement becomes firm and binding whether or not the underlying protection was ever actually confirmed. The buyer's waiver, signed twelve days earlier, had already done that work; the lender pulling approval afterward did not reopen it.
The seller's deposit was not the automatic answer either. A deposit can be forfeited where the buyer has waived every condition and simply fails to close — but forfeiture is never automatic: the brokerage will not release the funds to the seller without the buyer’s written consent or a court order. The buyer, unsurprisingly, would not consent. Where the parties disagree, the brokerage can file an interpleader application, paying the disputed deposit into the Ontario Superior Court of Justice and stepping out of the dispute — and a contested deposit handled that way can be tied up for many months.
Beyond the deposit, the seller's real financial exposure was the gap between the $780,000 contract and whatever the property actually resold for, plus the cost of carrying it in the meantime. Ontario contract law is built on compensation, not punishment: the default remedy is expectation damages, designed to put the wronged party where they would have been had the contract been performed — not to penalise the party who broke it. Specific performance, compelling the buyer to actually complete the purchase, is available in principle since every parcel of real estate is treated as unique, but courts award it only where money damages would be genuinely inadequate; sellers who simply want to be made financially whole almost always pursue damages instead.
To illustrate how those damages are actually measured — these are scenario figures, not a stated award — suppose the seller relisted immediately, sold 90 days later for $745,000, and carried $9,200 in mortgage interest, property tax and insurance during that stretch. The starting-point claim would be the $35,000 price shortfall plus the $9,200 in carrying costs, subject to the seller's own duty to mitigate — relisting promptly, at a realistic price, is exactly the kind of step that duty requires and that protects the size of the claim.
Contract price $780,000. Conditions waived 12 days before closing. Financing withdrawn 4 days before closing. Deposit: held, disputed, awaiting resolution. Illustrative resale scenario above: $35,000 price shortfall plus $9,200 carrying costs during a 90-day relisting period, before any deduction for the seller's own mitigation efforts or legal costs.
The waiver, not the financing collapse, was the operative event. Once every condition is waived in writing before its deadline, the agreement is firm regardless of what happens to the thing the condition was protecting against — that is precisely the rule the buyer's own written waiver invoked twelve days before the lender pulled approval.
The buyer refused to consent to releasing the deposit, and the brokerage filed an interpleader, paying the disputed funds into the Ontario Superior Court of Justice rather than taking a position itself. The seller separately relisted the property to begin mitigating the loss while the interpleader ran its course, and pursued a damages claim for the resale shortfall and carrying costs once a final sale price existed to measure it against.
Nothing about the buyer's genuine, unplanned loss of financing changed the legal analysis: the waiver had already made the deal firm, and a firm deal creates real financial exposure for the party who cannot complete it, independent of how sympathetic the reason turns out to be. See conditionally sold versus firm sold and the trust account and your deposit glossary entry, and a deposit that never arrived on time for a milder version of the same deposit-release mechanics.
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