Private lenders won't commit without an address, so why are buyers firming offers first?

A buyer walks into a condo pre-construction showroom in North York in February 2026. The sales rep tells him prices are rising monthly and the best units won't last past the weekend. He signs. The deposit clears. Three weeks later, he calls a mortgage broker. The broker asks for the address. There isn't one yet. The purchase is firm. The closing is in ninety days. The bank says maybe. The private lender says no without an appraisal. The buyer is now holding a $620,000 purchase with no financing and a non-refundable deposit at risk.

This version of the story happens more than it should, and almost always for the same reason. The buyer believed that willingness to lend meant commitment to lend. It doesn't. Banks pre-approve based on income and credit. They don't fund until the property passes their underwriting. Private lenders don't even pre-approve in the usual sense. They lend against the property. No address, no appraisal, no loan.

The mechanics matter more than the approval

A bank pre-approval is conditional by design. It says the borrower qualifies, assuming the property also qualifies. The property has to be owner-occupied or meet specific rental criteria under OSFI's 30% risk weight for owner-occupied mortgages. The appraisal has to come in at or above the purchase price. The title has to be clear. None of this can be verified until the buyer has an accepted offer with an address.

Private lenders work differently. They advance 65% to 75% of appraised value, sometimes 80% on high-value properties in strong markets. The rate runs between 7.5% and 12%, with the higher end applying to borrowers who couldn't get a bank mortgage under any terms. The appraisal is commissioned once the lender has the address and a copy of the purchase agreement. If the appraisal comes back at $580,000 on a $620,000 purchase, the lender funds to $464,000. The buyer needs $156,000 cash to close. That gap doesn't get negotiated. It gets paid, or the deal collapses.

Firming an offer before that number exists is the decision that breaks. A financing condition holds the deal open while the buyer verifies the actual advance amount the lender will provide. Sellers resist conditions because they want certainty. Buyers waive conditions because they want the property. The compromise used to be a short condition period. Typically five to seven business days. That window has closed on a lot of transactions in the last eighteen months, especially in pre-construction, where sales teams frame conditions as a sign the buyer isn't serious.

The framing is backwards. The serious buyer is the one who closes. Closing requires cash or a loan. If the loan isn't real until the appraisal is done, the offer should not be firm before that happens.

The rule holds even when the market tilts toward buyers

The current GTA resale market leans slightly toward buyers. Inventory rose through the spring. Prices plateaued. Sellers are taking longer to move properties. That dynamic makes it easier to insert a financing condition and have it accepted, which is exactly when buyers start to think they don't need one. The logic runs: if I can negotiate, I don't need protection. But negotiating power and financial certainty are separate variables. A buyer with leverage can still end up holding an unfinanceable deal if they waive the condition and the appraisal disappoints.

Industry experts advise against making property purchase commitments without securing financing conditions first, particularly in pre-construction deals. Builder delays and cost overruns can leave buyers unable to secure financing when the project closes, resulting in forfeited deposits and lost equity.

The mechanic to remember: the lender needs the address before the commitment becomes real. If you firm the offer first, the commitment you're counting on may not show up at all.