Financing Condition in a Promise to Purchase
Set a realistic deadline for the lender commitment and submit the documents before the condition expires.
In this article
The financing condition in a promise to purchase looks like a formality, but it is a stopwatch. The deadline, often ten or fifteen business days, has to cover the whole chain: the complete file delivered to the lender, the appraisal the lender orders, then the written commitment, received and reviewed. A verbal prequalification is not a commitment. If the deadline expires without a written answer, you may, under the promise, have to buy without confirmed financing or lose your deposit. The protections exist, but they run through writing: an extension negotiated before expiry, never after, and a waiver of the condition by written notice, in the prescribed form. Date and keep every document. This article covers the typical calendar, the traps of short deadlines and the clauses to negotiate before you sign the promise.
Negotiate a deadline that contains the chain
The financing deadline is negotiated when the promise is drafted, and it has to cover the real steps: the complete file delivered to the lender, the appraisal the lender orders, the review and the written commitment. Ten business days are enough for a simple, well-prepared file. A self-employed file, an unusual property or a busy season needs more. A deadline that is too short, accepted to please the seller, leads straight to a crisis in week two, while a realistic one rarely costs you the deal and lets you breathe. Preparing well shortens the chain: an up-to-date preapproval, documents gathered before the offer, the file sent to the lender the day after acceptance. Every day counts.
Feed the lender without delay
The stopwatch runs while the lender works, and its work depends on your documents: proof of income, confirmation of the down payment, statements. Each missing piece adds days. Send the complete file as soon as the offer is accepted, answer follow-up requests the same day, make the appraisal easy and arrange access to the property quickly. Follow up actively too, with a call to the broker or lender at the key stages. Never assume the file is moving. The days you save at the start of the deadline become your margin at the end. A commitment that arrives on day eight of ten leaves time to study its conditions. On day ten, it forces a rushed decision or an extension.
Extend and waive in writing only
Two moments require writing, without exception. First, the extension: if the commitment is late, the deadline is extended by a written amendment, signed by both parties before it expires. A verbal extension has no legal existence. Second, the waiver: the condition is waived by written notice, in the form and within the period the promise sets, once you have the lender's written commitment and understand its conditions. A conditional commitment, subject to an appraisal or checks, is not a final commitment. Neither are a prequalification or a verbal approval. Waiving the condition on their strength risks having the financing fall through after the waiver, with no way out.
Measure what expiry triggers
What happens when a deadline passes without action is spelled out in the promise itself, and it justifies all the discipline above. Depending on the terms, the buyer can end up bound to the purchase without confirmed financing, or in default with the deposit at stake, and termination has its own forms and its own delays. Read those clauses before you sign, with the broker or a lawyer if needed, so you know exactly what each scenario costs. Keep the whole chronology, every document dated: application, submissions, commitment, notices, extensions. When every step has a deadline and consequences, the written file is the only protection that works after the fact. Write things down as they happen.
Quebec scenario
A couple in Saint-Basile-le-Grand has its offer accepted on a Thursday evening: $512,000, conditional on financing, with ten business days to get it. Their broker explains that the deadline is not a formality, it's a stopwatch. By Friday morning the complete file is at the lender: proof of income, down payment, statements. The lender then asks for a property appraisal, which takes five days on its own. On day eight the written commitment still hasn't arrived. The couple now understands that a verbal prequalification is not a commitment, and that letting the deadline pass without a written answer could, under the promise's terms, force them to buy without confirmed financing or cost them their deposit. The broker secures a five-day extension, in writing, signed by both parties before expiry. The commitment arrives on day twelve, with conditions to meet before disbursement. The condition is then waived by written notice, in the form the promise prescribes. The couple keeps the whole chronology, every document dated. When every step has a deadline, the written record is what protects you, not your memory of it.
Checklist
- Negotiate a realistic deadline in the promise
- Send the complete file upon acceptance
- Track the appraisal the lender orders
- Demand the written commitment, not the prequalification
- Negotiate any extension in writing before expiry
- Waive the condition by compliant written notice
- Date and keep every document
- Know the consequences of an expired deadline
- Keep the full chronology on file
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