Offers, Bidding Wars, and Appraisal Gaps

A hot offer is still a contract

The market makes bidding feel like a race, but an offer is not a mood. It is a legal and financial promise. Once accepted and firm, the question stops being whether you wanted the home and becomes whether you can close on the exact terms you signed.

That is why the most dangerous words in a hot market are not "above asking." They are "no subjects" or "firm offer" when you have not priced the downside. A financing condition, inspection condition, document review, insurance check, title review, or sale-of-home condition can feel like weakness in a bidding war. In reality, conditions are how ordinary buyers keep one bad assumption from becoming a financial injury.

The appraisal gap is cash risk

An appraisal gap happens when the lender values the property below the price you agreed to pay. The lender does not usually lend against your enthusiasm. It lends against its underwriting and the property value it accepts. If the accepted value is lower than the purchase price, you may need more cash, a larger down payment, a revised mortgage, or a different lender. If you cannot solve it and your offer is firm, the deposit and legal exposure can be at risk.

Cooling-off rules are not universal

B.C. has a Home Buyer Rescission Period for many residential purchases, with a three-business-day window and a rescission fee if the buyer backs out. That is a provincial rule, not a Canada-wide safety net. Other provinces may have different rules or no equivalent for resale homes. New builds, condos, assignments, and special property types can also work differently.

The habit is simple: before you rely on a pause period, ask the lawyer or notary whether it applies to this property, this contract, and this province.

A strong buyer knows the walk-away point

The best time to decide your maximum price is before you are in a room full of competing offers. Write two numbers: the price your lender and budget can support, and the cash you can survive losing to closing costs, repairs, tax adjustments, moving, and appraisal risk. If the offer needs a third number that comes from panic, you are no longer negotiating; you are gambling against your own future.

A clean offer can be strategic. A blind offer is different. If you waive inspection, ask what system could fail first and what replacement would cost. If you waive financing, ask what happens if income, debt, property type, condo documents, appraisal, or insurance causes the lender to pause. If you waive document review, ask who is reading the problem after you are already committed.

The point is not to be timid. The point is to know which risks you are deliberately taking and which ones you are accidentally inheriting.

Your deposit is not just a placeholder

In a competitive offer, the deposit can become a signal of seriousness. It can also become the first real money at risk. Ask when it is due, who holds it in trust, when it can be released, and what happens if the deal collapses after subjects are removed. A larger deposit may strengthen an offer, but it should not be money you cannot afford to have tied up or disputed.

If your offer depends on family help, a gift, sale proceeds, or money moving from another country, confirm timing before the offer. Closing deadlines do not care that a transfer took longer than expected.