At first glance the four-bedroom, four-bath detached house in Scarborough — complete with white panelling and a bright-red front door — seems like just another recently sold Toronto property.
But both the buyers and the sellers have a way out.
The deal is under an “escape clause,” according to sales data on real estate company HouseSigma’s website.
The condition, listed in small orange font in the bottom left-hand corner of the listing, was “very rarely” seen during the height of the GTA’s real estate frenzy, said Robert Marsiglio, real estate sales representative with Valery Real Estate Inc.
But they’re becoming more common, he said, along with other conditions that buyers were warned off during the pandemic peak.
The escape clause in particular can give them the peace of mind that if their home or condo doesn’t sell in today’s chillier market, they can exit the deal.
“I just think there’s more of a willingness to negotiate from sellers, and maybe not even so much of a willingness as a necessity, to sell homes right now.”
It depends on the exact deal but in general, an escape clause is when the sale is conditional on the purchaser selling their own property, Marsiglio said, for example within 60 days.
To “sweeten” things for the seller, they are still able to show the property during this period, and, typically, if they get a better offer, the purchaser has a short timeline to either firm up or walk away. If the seller doesn’t sell their home they can also get out of the sale.
The buyer at 565 Rouge Hills Dr., the detached home in Scarborough, has one month to sell their own home, said Knox Meng, a salesperson with Nu Stream Realty (Toronto) Inc. who is on the listing.
In the meantime, the seller can keep showing the property, and if the buyer doesn’t sell their own home in that time frame the seller can accept another offer.
It’s the first such escape clause he’s seen, he said, but he expects he will encounter more.
Such clauses generally help buyers but introduce more uncertainty for sellers, Meng added. Instead of wrapping up the sale they have to wait for another one to go through, and it might not.
Anne Alkok, broker of record with digital real estate company Wahi, said much of the “softness” in the market she’s seeing is with condos. As many of those buyers are purchasing their first homes, an escape clause doesn’t make sense for them.
But a buyer who’s moving up, from a condo to a semi, for example, might want to consider one, she said, in case it takes longer to sell the condo than they expected.
Alkok, who works in both Toronto and Calgary, said she’s only seen one escape clause, on a recent deal in Calgary where the buyers were selling their own home under a conditional offer.
“The market for a number of years was so active that you could have put that offer in, but it would not likely be accepted,” she said.
She’s also seeing more buyers putting in home inspection and financing clauses, as well as a status certificate condition for condo deals that allows the buyer’s lawyer to inspect the status certificate to see if there’s any lawsuits and if there’s enough money in the reserve fund for repairs.
During the height of real estate prices, in 2022, realtors pushed back on buyers putting conditions on their offers, as it made them less competitive.
This ended badly for some new homeowners, like the Ontario couple interviewed in a 2022 Star story who bought a home without inspection only to discover a laundry list of problems.
According to a survey by real estate company Zolo, in 2022 only 36 per cent of Canadians used a home inspector for their purchase, but this rose to 41 per cent in 2023.
Marsiglio has been tracking the number of homes sold with escape clauses as a percentage of active listings on the Toronto Regional Real Estate Board’s MLS each week since the start of 2024. They are still classified as active listings until the deal is firm, and then they become sold.
It’s a very small fraction, at 0.31 per cent across the GTA but is on the rise in Durham region, where he does a lot of deals, at 1.19 per cent. That’s the highest it’s been since spring 2024.
“Maybe sellers out here are a little bit more willing to negotiate,” Marsiglio said, adding he’s also seen more classic conditions like home inspections. The average home price in Durham region was $905,702 in May 2025, according to TRREB, a 26 per cent dip since the peak in winter 2022.
Another way to look at it, is sold with escape clause as a percentage of all conditionally sold properties, which was 8.35 per cent this year compared to about 7.28 per cent last year, across the GTA, according to Marsiglio’s data.
Marsiglio would personally classify the market as “frozen” because the “desperation” from sellers is not quite there to make it a true buyer’s market.
But “it’s definitely more favourable for buyers right now than sellers,” he added, largely due to all of the available inventory.
It’s a shift, because during the peak, “negotiation from a seller’s perspective was: no, your offer’s not the highest one, pay me more money or else I’m not selling you my house,” he added.
“Whereas nowadays it’s truly a co-operative effort from both parties to try to come to an agreement, and I think the sold conditional with the escape clause really highlights that.”
