Buying a home is one of the biggest financial decisions most people will ever make. If you’re like most buyers in Manitoba—whether in Winnipeg or surrounding areas—you’ll probably rely on a mortgage to secure your dream property.
This is where a financing condition (also known as a mortgage or financing contingency) comes into play. It’s a clause in your offer that says your purchase depends on your ability to secure a mortgage. If your financing falls through, you can back out of the deal without losing your deposit.
Sounds like a safety net, right?
Yes—but in today’s competitive housing market, a financing condition can also come with risks that buyers should understand before including one in an offer.
In this blog, we’ll break down what a financing condition is, why buyers include it, and the potential risks you might face if you rely on one when buying a home in Manitoba.
What Is a Financing Condition?
A financing condition is a clause in your real estate offer that gives you a certain number of days (typically 3–7) to confirm your mortgage approval.
Here’s how it works in a typical Manitoba real estate transaction:
You make an offer to purchase a home and include a financing condition.
Your lender reviews your file—even if you have pre-approval—to ensure the property, your finances, and any required documentation meet their lending criteria.
If approved, you remove the condition and proceed with the purchase.
If denied, you can back out of the deal, and your deposit is usually returned.
This condition protects buyers from being forced to close on a property they can’t finance.
1. Sellers May See Your Offer as Less Competitive
The biggest risk of including a financing condition is that it can make your offer less attractive to sellers.
In Manitoba’s current seller’s market, many homes—especially in Winnipeg—receive multiple offers. Sellers naturally prefer offers with fewer conditions, as these are more likely to close without delays.
If you submit an offer with a financing condition while another buyer offers the same price without one:
The seller is more likely to choose the condition-free offer.
You risk losing out on the home even if your finances are solid.
Pro Tip:
If you’re in a competitive market, talk to your mortgage advisor about how strong your approval is. You may not need a financing condition if your finances and the property are a strong match.
2. You Could Miss Out on Bidding Wars
Bidding wars are common in Winnipeg’s high-demand neighbourhoods like:
Waverley West
River Heights
Crescentwood
Osborne Village (for condos)
When multiple buyers are competing, sellers often look for the cleanest, fastest offer. A financing condition could:
Knock you out of consideration immediately
Limit your ability to compete in multiple-offer scenarios
Even if you’re offering a higher price, the uncertainty of a financing condition might push the seller toward a slightly lower but unconditional offer.
3. The Clock Is Ticking on Your Financing Period
Another risk is time pressure.
When you include a financing condition, you usually have 3–7 business days to secure full approval. If your lender needs additional paperwork, an updated appraisal, or a second review of your file, delays can happen.
If the deadline passes:
The seller can accept another offer.
You may have to ask for an extension, which can weaken your negotiating position.
Scenario:
You make an offer with a 5-day financing condition.
Your lender needs an appraisal due to the property type or market conditions.
The appraisal can’t be scheduled in time.
Seller gets impatient—or another buyer swoops in—and your deal collapses.
4. Sellers May Push for a Higher Deposit or Price
When a seller accepts an offer with a financing condition, they are taking on more risk that the deal could fall through.
To offset that risk, sellers sometimes:
Ask for a higher deposit upfront
Push for a slightly higher purchase price
Limit the condition period to as few days as possible
This could put more financial strain on you as a buyer before you even know if the deal will finalize.
5. You May Lose Negotiating Power
If your financing condition remains in place:
Sellers may feel they can entertain backup offers.
You may be less likely to negotiate repairs, credits, or inclusions, because the seller knows you still need to firm up financing.
In some cases, this can weaken your leverage in the deal. Sellers often prioritize buyers who can move to a firm contract quickly.
6. Market Changes Can Affect Your Approval
While rare, a financing condition also comes with the risk of a changing market during your condition period.
For example:
Interest rates could rise suddenly (even slightly).
Lenders could tighten criteria if new economic data is released.
The property could be flagged for issues after the appraisal.
If this happens while your condition is active, your mortgage approval might fall through—and the home could go to someone else.
How to Minimize the Risks
If you’re worried about the risks of a financing condition, there are several strategies to protect yourself without losing out:
Get a Strong Pre-Approval
Work with a lender or mortgage broker to get a firm pre-approval, not just a basic pre-qualification.
Provide income verification, tax returns, and all required documents upfront.
Choose the Right Lender
Some lenders are faster and more flexible than others in Manitoba.
A local mortgage broker can help navigate quick approvals.
Shorten the Condition Period
Instead of a full week, consider 3 business days if your lender is confident.
Know the Property Type
Financing conditions are riskier for unique homes, acreages, or condos with special assessments.
Regular single-family homes in established neighbourhoods tend to appraise more predictably.
Have a Backup Plan
If possible, know your borrowing capacity from two lenders.
This gives you a fallback if one lender declines.
Should You Waive the Financing Condition?
Waiving a financing condition can make your offer more competitive, but it comes with its own risk:
If your mortgage is denied, you could lose your deposit or face legal consequences for failing to close.
You should only waive a financing condition if:
You have a strong pre-approval and confidence in your financial profile.
Your lender has reviewed the property type and location.
You are comfortable with the financial risk of proceeding without this safety net.
📌 Final Thoughts
A financing condition is a valuable tool to protect homebuyers from unexpected mortgage issues—but it isn’t risk-free.
The main risks include:
Making your offer less competitive
Missing out in bidding wars
Facing time pressure and reduced negotiating power
In Winnipeg’s competitive real estate market, the decision to include or waive a financing condition depends on your financial strength, lender confidence, and risk tolerance.
If you’re planning to buy a home soon, work closely with a trusted mortgage broker or lender to understand your options. A well-prepared buyer can make a competitive offer without unnecessary risk.
If you’re thinking about buying in Winnipeg or anywhere in Manitoba, I can help connect you with local mortgage experts and real estate strategies to help you compete confidently in today’s market.
📩 Contact me today to get started on your homebuying journey!
