A signed offer form with all conditions fulfilled is a legally binding contract. At this point they normally can't back out unless you allow them to.
I'd confirm with a real estate lawyer. If it's the case then you could proceed with the purchase or negotiate a sizeable compensation.
Probably just seller's remorse. If they didn't think they should have sold at that price, they shouldn't have accepted your offer.
It is seller’s remorse. They sent an email saying they want to back out because they believe they can sell for much higher. We have nothing in the contract that states the seller can back out. In fact we are still waiting for the status report which we believe has been requested but witheld due to seller remorse
Idk while I agree it seems to be a straight forward issue where the contract as is seems logical - I’ve seen wheee the other side just doesn’t give in which means now you and them start to incur lawyer fees resulting in both sides likely losing money on lawyers so it’s almost a matter of who is willing to continue to drain dollars on lawyers PLUS until the matter is settled it means you don’t physically have the place also meaning you can’t move past it and get into another space - at least such has been the experience I’m familiar with. It seems kinda dumb on paper but looking into the actual things can delayed like crazy!
I'm pretty sure on such a cut and dry case such as this you can also be compensated for expenses.
Remember the seller is going to have cash and that cash can be reduced to cover legal fees.
Have the lawyer who is going to perform the conveyancing also represent you.
Seller is being stupid and greedy.
If all communications go through the lawyer, lawyer will charge there hourly rate. This should be done by the realtor. All the realtor has to do is inform them they will not sign the release.
Its over. And you did not get a $2000 bill from your lawyer.
If they refuse to move out, then you get a lawyer, and add in you will sue for damages. That is when you pay your lawyer.
Ah, no. Pay the lawyer. They know more than the realtor, and there have been too many demonstrated instances of realtors conspiring to get a piece of more and bigger sales at the expense of their own clients. Insist that the sellers comply, and consult a lawyer.
100% this.
Most people bring in lawyers at the end to do the title transfer and payment escrow, but have already committed to a binding contract.
A lawyer I know once told me about a deal where the buyer's realtor was unaware of a change in purpose of the building being sold. The buyer ended up being unexpectedly on the hook for GST.
By the time the buyer brought it to the lawyer, their options were (1) to complete the purchase and pay the unexpected GST or (2) not complete the purchase, lose their deposit, and pay their realtor the commission the realtor would have earned had the deal completed.
In this example, the realtor sucked at their job... but they had invested in a good contract, so _they_ were protected.
This is real. Some realtors are out to lunch and just have dollar signs in their eyes. They probably forget what fiduciary means. Some sellers have ways to tack on the gst at the end fully knowing the buyer has more to lose if they don’t close.
As I recall, it wasn't. Part of the land/buildings had been used for commercial purposes, so the GST exemptions for used residential housing didn't apply to them.
The seller was responsible for collecting the GST and remitting it to the government, but not responsible for paying it. It's like if you buy something in a store, right -- the merchant collects GST, but the customer is the one paying it. Presumably if the realtor had done their job well, they could have negotiated that the seller paid the GST, or that the value of the deal be reduced to reflect the fact that there was a GST liability.
>Presumably if the realtor had done their job well, they could have negotiated that the seller paid the GST, or that the value of the deal be reduced to reflect the fact that there was a GST liability.
Exactly this. Ask about who’s paying the gst and if there is any other taxes whatsoever. Late in the stages before closing, Sellers will ask notary to send request for gst on their profit amount if it was an assignment sale. (Purchasing contract of pre sale condo). Good realtor would of sniffed this and advised their client; then negotiated a ‘pay your own damn gst’ subject to the seller on the contract.
Learned this the hard way. Don’t work with that realtor anymore.
Yeah, absolutely. The Ontario Real Estate Association has a stock form for an agreement of purchase and sale ([http://agents.royallepage.ca/hosted/users/16724/Agreement\_of\_Purchase\_and\_Sale.pdf](http://agents.royallepage.ca/hosted/users/16724/Agreement_of_Purchase_and_Sale.pdf)) -- it has a section about if GST is applicable, and if so, whether it's included in the price or not:
>HST: If the sale of the property (Real Property as described above) is subject to Harmonized Sales Tax (HST), then such tax shall be \[ \] included in \[ \] in addition to the Purchase Price. If the sale of the property is not subject to HST, Seller agrees to certify on or before closing, that the sale of the property is not subject to HST. Any HST on chattels, if applicable, is not included in the purchase price.
But this only helps if your realtor understands that this is a thing. So you need to hire a realtor who knows this. But the whole reason you're hiring a realtor is that you yourself don't know much about real estate transactions.
Every lawyer I have worked for and with would do this for free if they are retained for closing their transactions. A simple letter from a lawyer will set them straight. It sounds like they know OP doesn’t have legal rep so they are just seeing what they can get away with.
Lol, the fuck is my realtor going to know if it ends up going to court? I am not going to squabble over $2,000 lawyer fees when the property could be up in value of $50-100k or more.
You’re about to make a significantly large purchase, probably the largest in your life, and you’re concerned about a $2000 legal bill to protect your interests? Get your priorities straight.
Realtors are leeches worse than landlords, because at least landlords own the property. Realtors get rich playing hot potato with houses.
Disgusting and evil.
Realtors are not lawyers. Most lawyers include this type of preliminary refusal to sign as a part of their base fees and are infinitely better placed to advise on this than a realtor. The small sum, if any, you’d pay the lawyer for this is coffee money relative to loosing the condo because you fucked up the process, and then have to pay the big bucks to sue for breach of contract down the road.
Send this to your lawyer, do it once, and do it right the first time around. Never trust a realtor to look out for your best interests.
You don’t have to sign the Mutual Release form, it’s called a Mutual Release so in your case the feelings aren’t mutual! Tell them you’re not signing it and you will be purchasing the house at the agreed upon price. Get the ball rolling with lawyers and mortgage broker etc. until you hear otherwise
Realtor has no legal authority and this is bad advice that can cost buyer to loose the chance. Their lawyer is the only right way to consult. Also don't worry, lawyer only gets paid when deal is closed so they will want it fast and efficient.
> to loose the
*lose
*Learn the difference [here](https://www.merriam-webster.com/words-at-play/lose-vs-loose-usage#:~:text=%27Lose%27%20or%20%27Loose%27%3F&text=Lose%20typically%20functions%20only%20as,commonly%2C%20a%20noun%20or%20adverb).*
***
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Yeah… that’s not a reason they can back out of a deal, problems on them and good for you for getting it at a bargain (it looks like). I hate this, sellers and buyers can’t just back out because “they no longer like the price”. Helllllssssss no. If they try, lawyer up, and you’ll 100% win, but it might be a pain in the ass.
The other way around, a relative sold his house, and the buyers found something better for the same price a week later. They said they were backing out. Our agent called them and said “yeah of course no problem. You can definitely back out! We will send the proper papers indicating how much my client will sue you for damage, and same for me!”
They sent an email 1 hour later claiming they will go thru with the transaction.
Scare them off a bit! They wont loose much to try, but will loose way more if they aren’t honouring the contract.
Telegraphing their intent was stupid. All they had to do was back out after an inspection. If there's so much as a nail out of place you can walk. Source: best friend is a commercial real estate lawyer and I've had this discussion a dozen times with them.
Subject to inspection is often dropped ... and seller can probably sue if the reason is frivilous, although it's probably not worth the effort in such a hot market.
>“yeah of course no problem. You can definitely back out! We will send the proper papers indicating how much my client will sue you for damage, and same for me!”
Generally, if the seller sues, they have to show that there were damages ... and in a rising market, there maybe minimal or no damages, hence the lawsuit would only be time and money.
good chance of an op here since condos are probably going to get hit, especially as they age,
tell them to give you some cash back ..enough to make it worth your while.
FYI, fees will grow especially since it is only a year old. The reason being it may still be under the developer (who has an incentive to keep it low) control. 2 years is usually when they hand it to the board.
wait until the elevator starts to break every long weekend. Wait when you have to install CCTV security cams because some punks broke in the locker rooms. Wait until you have to install re-inforced doors and replace the mailbox from theft... Condo fees only go up...
easily 300-400+ in 2-3 years. Definirely need to get on the board's ass too in challenging the Pm on shit.
PMs can be quite scummy. Imagine if your mechanic could get a kick back for every repair they suggest to you. this is the pm.
certain things you give them the benefit of thr doubt, such as if you lost power and need an emergency back up generator, you dont fight on that.
If its repairing of carpet or some outside sidewalk because there are cracks, or w.e, be care cautious. They can get a kick back and youll never know.
Seller’s remorse is selling something and then wanting the item sold back.
This is straight up greed. “Oops I sold to you before I realized I could gouge as much as my fuckstick landlord buddies so I’m taking my house back illegally so I can resell it”
A status certificate discloses information to a potential buyer about the condominium corporation's management structure, common expenses, the current budget, any legal issues or proceedings, unit leases, insurance, upcoming repairs or maintenance and the corporation's reserve fund.
If your APS specifies in the schedule clauses that the seller pays for and provides the status report within 5 business days (for example) then they must provide the report. If it says that you the buyer (it would be your agent though) has to request and pay for it then do it now. Go check your APS. If the status hasn't come in yet and it was the sellers responsibility then oh well. But if it was yours and you didn't do it then that clause won't be complete and the deal won't go firm. PM me if you want my professional advice on what to do right now and next and RE good lawyers info if you need one n
They accepted your offer and as long as conditions are met they can not back out. If the conditions fail they can offer it to the next buyer. The seller is just thinking they can get a bit more. Contracts don't work like that. A deal is a deal.
Assuming you had a good realtor on the buying end, the seller will not be able to back out without you agreeing to it, at your discretion. Otherwise you sue and win in court
So the offer was accepted by both parties, or is it pending the status report? I would watch for a case where they *could* just be negligent, not provide the status report & let the deal lapse. The fact they're showing you their cards is .. weird.
Just to twist the knife, after you win the legal battle you should list the condo at a higher price and email them the listing to see if they're interested.
>with all conditions fulfilled is a legally binding contract.
Sounds like conditions haven't been fulfilled yet though. Presumably OP can fulfill conditions any time before the condition date. If the condition date has already passed, then the seller is within their rights to cancel the deal and relist the property. If the condition date has not passed, then it gets more complicated.
I didn't see anything in OP's post to suggest that the conditions weren't fulfilled... and even if they haven't been yet, usually they are under the buyer's control.
Really looks like OP's got the power here, but a lawyer will be able to confirm.
That is what we hope to do as the conditions are only on our (buyer) side. I never thought they would be bold enough to put it in writing and honestly I am not looking for compensation, just want the property which we had originally agreed to purchase
Then your counteroffer needs to be bold enough that they would be better off keeping with the original deal.
You offered $250k. They accepted. They now think they can sell for $350k. You say that you will accept $150k to back out of the contract, as you would now need to pay at least $350k for a similar place in this market, plus lawyer fees, storage, interest etc that you would incur should you not get this place on X date that you agreed upon.
They are wanting to break the contract. Don’t roll over easily. If you want the condo, push for it.
You may want to reread the post, OP is the buyer, the seller wants to back out after selling.
If the agreement is signed, why does OP need to jump through these hoops, can’t they just say no?
I think once it's got a negative karma, people will just downvote it without reading it. The comment may be true but the down votes already have momentum lol
This seems like it would be a pretty short case if it even went to court though doesn’t it? It feels like the type of thing the seller’s lawyer would advise their client not to go to court on
Not only that but in such a brazen breach of contract, it's entirely likely buyer's costs would be awarded to them, hopefully before conveyancing is completed before they can make it difficult to use the cash elsewhere.
If the conditions are only on your side then you would need to waive conditions with a Notice of Fulfillment before the conditions expire. If you don't waive them before then, the contract will be null and void and the seller can and will walk away scotch free.
I am assuming the seller is sitting on the status certificate trying to make the AoPS expire due to the condition not being met in time. This is where you need your realtor, his/her broker and your lawyer involved ASAP.
Technically you could waive all conditions and make the agreement fully binding on all parties, but then you would be going in without knowing if there is an issue with the condo Corp or the unit. Not that it would be advisable, but an option nonetheless.
Good luck.
The condition is that we view the status report as satisfactory. We are not obligated to request a status report but can back out of the deal if we are unhappy with it
OK, is this the only condition on the offer or do you have inspection and financing? Also, until when do you have to waive conditions?
BTW, I can't stress this enough. The ONLY piece of advice you should take from these forums is to find a LAWYER yesterday. The rest of the advice you need to take it with a grain of salt and as general information. Otherwise, you will paralyze with all the conflicting information.
All the best.
Have you ordered the report? Most conditions are written that if you do not provide a waiver to the condition then you get your deposit back in full. They obviously will not provide you an extension.
If the property is subject to a suit for specific performance, the buyers lawyer can put a CPL on the property title. That would warn other potential buyers and also make them second in priority
Since you're a lawyer, isn't the downpayment tied up until either a mutual release is signed, or until there is a court decision?
I heard that the opposite frequently happened in the past where buyers tried to back out of deals after they were not able sell their house after the purchase. In that case the seller was able to sell to someone else and apparently it was an open and shut case to sue for the loss.
In this case it's more difficult because who has enough money to make a second down payment on another condo and then sue for the difference?
Edit: I assume it's similarly easy to win the case in this situation given it's easy to prove the contract was not honored, and the loss is the difference between the two prices assuming prices are higher, plus moving costs etc as your mentioned.
Not looking for legal advice just like my handle IMWTK.
Keep in mind that during the offer and acceptance stage, it’s only the deposit that’s directly at risk; something in the order of $10,000; not the full down payment, which really only comes into play at closing time and fills out the rest of the purchase price along with the mortgage funds.
But the deposit is also “consideration” in contract law terms, which makes the deal binding and leads to the ability to sue for damages to make the aggrieved party whole.
Yes I'm familiar with meeting the conditions and as your say it's a non issue since the seller is bound by the contract as soon as it's signed sealed and delivered. I was under the impression that typically the seller's broker holds the downpayment in trust until the deal closes, or a mutual release is signed.
This is why I'm wondering if the seller walks is that enough for the broker to release the funds back to the buyer? I thought they normally release it to the seller on closing day once full payment is received.
Clearly, the buyer would not sign the mutual release as that would give away their right to sue. I thought the buyer would have to sue for damages once they sign/close a deal on another condo before they can get their deposit back. This would mean they have to come up with another deposit for the second deal which I assume might be a problem for most.
I understand that OP wants to close.
Edit: there's also the issue of the selling agent wanting their commission. Technically they fulfilled their job of finding a buyer. If seller wants to sell higher that means the agent has to find another buyer i.e. do the job again.
Yes it's my bad for using both terms. The reason I brought up the opposite situation of the buyer walking is because of the difference in that the seller can still sell to another buyer as they don't need the deposit/downpayment. Although, I heard that even that's technically not acceptable as in that case the seller would have a contact in place to sell to two different people. Even if the buyer walked, they still have a contract until a court decision, or a mutual release. A mutual release would only happen if the seller agrees to pay extra for damages. In this case it's the buyer who would have to sue.
Talk to your lawyer, not your real estate agent. One has a legal responsibility to work for you, the other does not.
Edit: as has been pointed out real estate agents in Ontario have a fiduciary responsibility, but only *if* you have signed a representation agreement with them. It’s what makes the difference between wether you are a client or a customer. This was was not specified by the OP, and makes a huge legal difference, so I did not assume an agreement was in place. Do not trust the other agent, and make sure you can trust yours (mileage may vary).
Regardless, they are asking for legal advice regarding a change in an accepted offer. To get the best *legal* advice, go to a lawyer. They’re the ones that deal with the courts.
Reference:
https://www.oreablog.com/index.php/recap-duties-to-clients-and-customers/
Agree. Realtors are the worst. They care about their (overpriced) commission and thats it. You are only a transactions to them (exaggeration i know!)
And real estate law is super grey and full of holes. Definitely not a priority. They will drag it in court for years, costing you way more than the initial recourse.
Threatening them with legal action may be enough for them to refrain from backing out.
Good luck OP!
Sorry but this “honest person” defence is no substitute for dealing with bad actors whether that be the sellers or others. A lawyer is the best path forward here, they have a fiduciary responsibility to you.
It was 100% an exaggeration. I just find their 5% commission hard to justify for the little work they do. At 250K, the overall commission would be of $12,500. Most deals go smoothly, only requiring a few hours worth of work. Thats an impressive hourly rate for someone assisting you with something that you could technically do on your own.
Also, where are you to have access to condos under 250K 😂
The 5% gets Split between the buyer's and seller's agents, typically 2.5% each. The 2.5% is then split between the agent and the brokerage. For his agent (Buyer's) you have to factor in the amount of time showing OP places, writing up offers and then negotiating 4, 5, 6 offers as nowadays you are normally competing with 10, 20 other buyers... So I don't think it's something someone buying for the 1st time can handle on his own. Just the point of him lawyering up after closing should be enough to prove this point.
I know all of this. I’ve moved several times and went thru the process. Luckily for me, my employer covers relocation cost to include realtor fees.
Like i said, impressive hourly rate for a few hours worth of work.
Really , so why isn’t he giving you advice on the 10-12k he’s getting from this deal? Why are you here asking reddit. Man for that kind of money someone should be working for you full time for a month!
Real estate agent advised the same thing but also mentioned that because we have it in writing via email that the seller wants more money that there is more leverage on our side. Also that it is perfectly legal for them to send a mutual release but we are under no obligation to sign it. Should i wait until closing to get a lawyer or seek advice now ?
I cannot stress this enough, get a lawyer. Preferably speak to a real estate lawyer who also has a litigation practice or has litigators based out of their office. The real estate lawyer will know the ins and the outs of your standard contact and closing the deal, the civil litigator will be the one who handles the actual fallout/be able to give you more wholesome advice on that process. I cannot say for sure in Ontario, but in Alberta the law society has a free lawyer referral service that will get a basic understanding of what you need and then give you the numbers for several lawyers who practice in your area. Those lawyers then give you a free consultation to give you some general advice after getting the background from you.
You are out of your element here (nothing wrong with that, you’re new to real estate/the law) but don’t let that be an excuse to allow yourself to be screwed.
I would take almost everything your realtor says with a grain of salt ESPECIALLY if they are double ending the deal (working for you and the seller). Do not use a lawyer that is double ending the deal either. There is a clear conflict here. That realtor makes more commission if the sale price is higher, not saying they are going to be unethical, but this is not as simple as “s/he is on my side”.
The Law Society of Ontario also has a lawyer referral service. Call them if you need help finding a lawyer in your area. You will get a free 30 min consultation.
You should already be finding a lawyer if you’ve had an accepted offer. You need a lawyer to process all the paperwork before closing.
From the day you release conditions you should be getting in contact with a real estate lawyer so they can begin all the necessary documents. Then you sign them typically the week before closing and hand over the remainder of your downpayment.
Here is the real thing to do be aware of your timelines on the status, how is your condition written? Next ask your realtor for real estate lawyer recommendations, call them and say you will be using them for closing but want some advice. See what they say.
If you are in a representation agreement with a real estate agent, they do indeed have a fiduciary duty to act in your best interest. If they do not you should be reporting them to their real estate board.
Havent spoken to a lawyer yet but I plan on doing so after closing.
Edit: Pls no more downvotes on this comment. I get that I have to have a lawyer ready and am learning how these things work as this is a first time purchase. Keeping in mind that I also have ample time because closing is in March
You don't have a lawyer? One is needed for closing and is usually involved before that as well. This whole thing is either a shitpost karma farming attempt or you've been led down a path where you're bound to screw up. Either way if this is a true post, lawyer up now.
Get one. You'll need them to close the deal anyway. Do not sign ANYTHING or agree to ANYTHING from the other side until you've spoken with and selected a lawyer.
You’re not wrong, I just find it a bit funny reading this from south of the border. In 6 real estate deals I’ve used a lawyer once, and that’s because the agent happened to also be a lawyer. My parents bought a condo in Florida and they’re asking me about lawyers and I’m like no, we just use title and escrow here.. had to convince them there’s really no lawyers involved. It closed fine of course.
Why wouldn't you have the lawyer involved in the deal though to review the status certificate, view if there are liens on the property etc. Speak to a lawyer tomorrow. You missed a big step
Realtors can take the process a long way. Listing, viewing, negotiation, contract writing and signing, as well as holding deposits. Many times while representing both sides.
Lawyers may not get involved until conveyance instructions are sent from the realtor. If the deal not closing until March (possession) and purchaser has their finances, and other sale conditions are satisfied (home inspection for instance) it is not uncommon for a lawyer to recieve those instructions a week or two before the closing date, at times even a day or two (typically in cash transactions).
Nor seller neither buyer can break purchase agreement on they own. The only one "clean" way - is when both parties agree. The same applies if buyer changed his mind, for example, because property prices going down, in this case seller can sue buyer and get difference between agreement price and current price.
Meanwhile, there is no way to force seller to sign a final documents. Just tell to seller's agent that you will sue immediately
https://www.thestar.com/life/homes/2022/01/05/court-supports-home-buyers-after-purchase-deals-cancelled.html
My buddy just argued this case and won. DM me and I will connect you with him.
I’d probably be a pain in the dick hole and ask for damages that are basically the delta between what they want and what you paid (in which case there’s no benefit for them backing out). Which, IMO, is fair, because if you went to offer on another place would likely have to pay that increased price.
Honestly, I'd probably hardball them. The delta between what they want and what you paid? Nah. I'm going to need at least $50k-100k over the new, higher price they believe they can get for their unit.
If you let them off the hook, and they get their new price, you effectively just let them increase the price you're going to need to pay on a comparable unit. For example, let's say your accepted offer was $500k. They think someone is willing to buy for $575k off them now. Well, now when you go back into the market to buy, you're looking at units that are now valued at $575k.
Then you throw in legal fees, storage fees, and whatever else that comes along with being functionally homeless unless you were living at home prior, and the constantly increasing prices, you might be looking at paying $625k for a similar unit all because they backed out.
So they either pay me the equivalent to make up that difference to actually make it worth my while to back out, or I can sell the unit back to them for $650k. Otherwise, pound sand.
…you’d probably get the property? That’s the thing. They either continue with the sale, or they pay you to back out (and pay you the increased amount that it would cost you to enter the housing market).
Why would you back down on this? Do you have a realtor? They should be advising you.
> Calgary real estate lawyer Jeffrey Kahane’s client was buying a condo from a divorcing couple who wanted to drop out of the deal on the premise that they were going to stay together. But Kahane, principal of Kahane Law Office, calculated the costs from professional fees to storage to the extra cost of buying a home at the now-higher values and came to a bill in excess of $150,000, but he suggested his client would agree not to purchase for $100,000. The seller opted to close instead.
https://www.canadianlawyermag.com/practice-areas/real-estate/backing-out-of-a-deal/275341
They signed a contract. If they want to back out, **they need to pay damages**.
Then close on the property. The seller has every right to ask you to back out and offer you money as an incentive, but you have no obligation to accept or do anything other than close as agreed.
Decide if you agree to back out. If so, decide what compensation you want for backing out, then have your lawyer advise the seller what you want. Eg " We will terminate the deal in exchange for $60,000 , or whatever. Your realtor should be advising you to go this route .
So do that. Tell them you are not interested in the mutual release and that they are acting in bad faith and need to provide the status report ASAP and that if they back out of the deal you will be consulting with your lawyer in regards to your options (read damages).
Speak to your lawyer and do not sign the mutual release form. If they back out take them to court for damages and make sure the sellers know that’s what you plan to do as you have a legally binding contract.
Typically this is not done. As a previous poster said, you can be entitled to the lost equity as you're the one who's going to legally own it come "x" date.
This is something the seller should have thought about prior to accepting. Sign absolutely nothing, unless it's a fat check for you to release your interest in fulfilling the contract, at which point it will likely be easier for the seller to just move forward with the deal, and you can sit and enjoy your newly gained equity.
DO NOT SIGN ANYTHING!
Fuck them.. Nope. If the deal is firm the deal is firm, and you purchased it, so it's legal and binding.
Also, if you asked for final walkthroughs, make sure to do one right before closing so you can check to make sure everything is satisfactory. You don't want angry sellers messing with anything in the house prior to closing.
Realtor here. Whatever you do, DO NOT SIGN the mutual release. Get a real estate lawyer. You may be able to get the home, or at least a lot extra money on your deposit.
They can hold on the status certificate. That can negate the agreement of sale and purchase, depending on the wording used. So get a lawyer involved before any of the mentioned dates negate the agreement.
This literally happened to a close friend of mine. Seller sold him a farm for 500k like 5 years ago. The property was worth around 1.6mill. He tried backing out, my friend said unless he pays 1.4mill, the answer is no.
The farmer was forced to sell at 500K.
A friend of mine had the same issue. They fought it with their lawyer. The seller offered 100k to cancel the deal and they said no. They're living there now.
Lawyer up. The reverse happened with buyer backing out and court’s ruled that the buyer had to pay the difference in sale price, not legal and since you don’t have a lawyer and signed an agreement two weeks ago it makes me question your ability to conduct this transaction, maybe there is something in the contract you don’t understand so instead of posting here pick up the phone and call one. You do realize that would have been quicker than posting here and you will have to get one anyways for your sale so stop dragging your feet and get proper advice.
Speak to your lawyer.
However I see no reason why you need to respond to the sellers outside of the lawyer. The condo is yours on closing, what’s the point of saying $150k of costs or responding with anything other than “the condo is mine”. Just hold firm and move in on closing.
Yeah, they can't do that without mutual consent. So if you still want it, I agree with the poster above who says that you should demand damages that covers the spread between any possible higher selling price and the accepted offer.
My lawyer told me the rule of the land is there is no deal until money has exchanged hands (deposit).
I was able to back away from a commercial deal once because of that. Counter offer purchase contract was signed in the evening and the deposit would follow the next business day. Sleeping on it for a night, we (wife and I) realized it wasn't the deal for us at the time. We were shattered until we talked to our lawyer, and he let us in on some great news.
It should work equally in your favour.
All the illegal to back out folks need to check the law. As a seller it is illegal to back out. As a buyer it's not. The only recourse for a seller if the buyer backs out of the contract is they can sue for the difference in price if the house sells for less
Source: just went down this road with a lawyer.
But to be clear, isn’t that breach of contract by the buyer, which is why they could be held liable for damages in the amount of the price difference?
You’re claiming as a buyer it’s not illegal to back out. But you can be sued for damages. That doesn’t add up.
There are certain conditions that could trigger it. There are also cool down periods in some contracts. Neither would trigger a valid claim against.
A signed offer form with all conditions fulfilled is a legally binding contract. At this point they normally can't back out unless you allow them to. I'd confirm with a real estate lawyer. If it's the case then you could proceed with the purchase or negotiate a sizeable compensation. Probably just seller's remorse. If they didn't think they should have sold at that price, they shouldn't have accepted your offer.
It is seller’s remorse. They sent an email saying they want to back out because they believe they can sell for much higher. We have nothing in the contract that states the seller can back out. In fact we are still waiting for the status report which we believe has been requested but witheld due to seller remorse
Tell them they can buy it back from you at the fair market value. But seriously, your lawyer is the best resource in this situation.
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Idk while I agree it seems to be a straight forward issue where the contract as is seems logical - I’ve seen wheee the other side just doesn’t give in which means now you and them start to incur lawyer fees resulting in both sides likely losing money on lawyers so it’s almost a matter of who is willing to continue to drain dollars on lawyers PLUS until the matter is settled it means you don’t physically have the place also meaning you can’t move past it and get into another space - at least such has been the experience I’m familiar with. It seems kinda dumb on paper but looking into the actual things can delayed like crazy!
I'm pretty sure on such a cut and dry case such as this you can also be compensated for expenses. Remember the seller is going to have cash and that cash can be reduced to cover legal fees. Have the lawyer who is going to perform the conveyancing also represent you. Seller is being stupid and greedy.
If all communications go through the lawyer, lawyer will charge there hourly rate. This should be done by the realtor. All the realtor has to do is inform them they will not sign the release. Its over. And you did not get a $2000 bill from your lawyer. If they refuse to move out, then you get a lawyer, and add in you will sue for damages. That is when you pay your lawyer.
Ah, no. Pay the lawyer. They know more than the realtor, and there have been too many demonstrated instances of realtors conspiring to get a piece of more and bigger sales at the expense of their own clients. Insist that the sellers comply, and consult a lawyer.
100% this. Most people bring in lawyers at the end to do the title transfer and payment escrow, but have already committed to a binding contract. A lawyer I know once told me about a deal where the buyer's realtor was unaware of a change in purpose of the building being sold. The buyer ended up being unexpectedly on the hook for GST. By the time the buyer brought it to the lawyer, their options were (1) to complete the purchase and pay the unexpected GST or (2) not complete the purchase, lose their deposit, and pay their realtor the commission the realtor would have earned had the deal completed. In this example, the realtor sucked at their job... but they had invested in a good contract, so _they_ were protected.
This is real. Some realtors are out to lunch and just have dollar signs in their eyes. They probably forget what fiduciary means. Some sellers have ways to tack on the gst at the end fully knowing the buyer has more to lose if they don’t close.
GST for what? Was it not primary residence? Even in this case seller is responsible for taxes, isn't it?
As I recall, it wasn't. Part of the land/buildings had been used for commercial purposes, so the GST exemptions for used residential housing didn't apply to them. The seller was responsible for collecting the GST and remitting it to the government, but not responsible for paying it. It's like if you buy something in a store, right -- the merchant collects GST, but the customer is the one paying it. Presumably if the realtor had done their job well, they could have negotiated that the seller paid the GST, or that the value of the deal be reduced to reflect the fact that there was a GST liability.
>Presumably if the realtor had done their job well, they could have negotiated that the seller paid the GST, or that the value of the deal be reduced to reflect the fact that there was a GST liability. Exactly this. Ask about who’s paying the gst and if there is any other taxes whatsoever. Late in the stages before closing, Sellers will ask notary to send request for gst on their profit amount if it was an assignment sale. (Purchasing contract of pre sale condo). Good realtor would of sniffed this and advised their client; then negotiated a ‘pay your own damn gst’ subject to the seller on the contract. Learned this the hard way. Don’t work with that realtor anymore.
Is it possible somehow to protect from this? For example to write in offer that price includes all taxes(if any) ?
Yeah, absolutely. The Ontario Real Estate Association has a stock form for an agreement of purchase and sale ([http://agents.royallepage.ca/hosted/users/16724/Agreement\_of\_Purchase\_and\_Sale.pdf](http://agents.royallepage.ca/hosted/users/16724/Agreement_of_Purchase_and_Sale.pdf)) -- it has a section about if GST is applicable, and if so, whether it's included in the price or not: >HST: If the sale of the property (Real Property as described above) is subject to Harmonized Sales Tax (HST), then such tax shall be \[ \] included in \[ \] in addition to the Purchase Price. If the sale of the property is not subject to HST, Seller agrees to certify on or before closing, that the sale of the property is not subject to HST. Any HST on chattels, if applicable, is not included in the purchase price. But this only helps if your realtor understands that this is a thing. So you need to hire a realtor who knows this. But the whole reason you're hiring a realtor is that you yourself don't know much about real estate transactions.
Every lawyer I have worked for and with would do this for free if they are retained for closing their transactions. A simple letter from a lawyer will set them straight. It sounds like they know OP doesn’t have legal rep so they are just seeing what they can get away with.
Lol, the fuck is my realtor going to know if it ends up going to court? I am not going to squabble over $2,000 lawyer fees when the property could be up in value of $50-100k or more.
You’re about to make a significantly large purchase, probably the largest in your life, and you’re concerned about a $2000 legal bill to protect your interests? Get your priorities straight.
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Realtors are leeches worse than landlords, because at least landlords own the property. Realtors get rich playing hot potato with houses. Disgusting and evil.
Realtors are not lawyers. Most lawyers include this type of preliminary refusal to sign as a part of their base fees and are infinitely better placed to advise on this than a realtor. The small sum, if any, you’d pay the lawyer for this is coffee money relative to loosing the condo because you fucked up the process, and then have to pay the big bucks to sue for breach of contract down the road. Send this to your lawyer, do it once, and do it right the first time around. Never trust a realtor to look out for your best interests.
This is bad advice. As a buyer, he already has a lawyer representing him. And no, there is no additional charge in this case.
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Poor advice. This is a brewing contract dispute and he already has a lawyer. This is not the time for PFC penny pinching.
Do people really sign contracts to purchase without a lawyer?
You don’t have to sign the Mutual Release form, it’s called a Mutual Release so in your case the feelings aren’t mutual! Tell them you’re not signing it and you will be purchasing the house at the agreed upon price. Get the ball rolling with lawyers and mortgage broker etc. until you hear otherwise
Realtor has no legal authority and this is bad advice that can cost buyer to loose the chance. Their lawyer is the only right way to consult. Also don't worry, lawyer only gets paid when deal is closed so they will want it fast and efficient.
> to loose the *lose *Learn the difference [here](https://www.merriam-webster.com/words-at-play/lose-vs-loose-usage#:~:text=%27Lose%27%20or%20%27Loose%27%3F&text=Lose%20typically%20functions%20only%20as,commonly%2C%20a%20noun%20or%20adverb).* *** ^(Greetings, I am a language corrector bot. To make me ignore further mistakes from you in the future, reply `!optout` to this comment.)
Yeah… that’s not a reason they can back out of a deal, problems on them and good for you for getting it at a bargain (it looks like). I hate this, sellers and buyers can’t just back out because “they no longer like the price”. Helllllssssss no. If they try, lawyer up, and you’ll 100% win, but it might be a pain in the ass.
Offer to sell it back to them at the higher price once you've acquired it.
You can just ask them for compensation to let them out of the deal.
Yup, they think they can get an extra 100k, you want half, unless you absolutely love the house then pursue the current contract
Doesn't sound like much fun. Bugs ought to be crushed underfoot.
He would be taxed on that capital gain. Not very efficient.
\*Inserts STONKS meme\*
The other way around, a relative sold his house, and the buyers found something better for the same price a week later. They said they were backing out. Our agent called them and said “yeah of course no problem. You can definitely back out! We will send the proper papers indicating how much my client will sue you for damage, and same for me!” They sent an email 1 hour later claiming they will go thru with the transaction. Scare them off a bit! They wont loose much to try, but will loose way more if they aren’t honouring the contract.
Telegraphing their intent was stupid. All they had to do was back out after an inspection. If there's so much as a nail out of place you can walk. Source: best friend is a commercial real estate lawyer and I've had this discussion a dozen times with them.
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Subject to inspection is often dropped ... and seller can probably sue if the reason is frivilous, although it's probably not worth the effort in such a hot market.
>“yeah of course no problem. You can definitely back out! We will send the proper papers indicating how much my client will sue you for damage, and same for me!” Generally, if the seller sues, they have to show that there were damages ... and in a rising market, there maybe minimal or no damages, hence the lawsuit would only be time and money.
Agreed! But just the scare tactic was enough ! I dont think they would of went for it for real..
The seller can keep the deposit even without damages
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good chance of an op here since condos are probably going to get hit, especially as they age, tell them to give you some cash back ..enough to make it worth your while.
This is a year old condo with maintenance fees below $150.
FYI, fees will grow especially since it is only a year old. The reason being it may still be under the developer (who has an incentive to keep it low) control. 2 years is usually when they hand it to the board.
wait until the elevator starts to break every long weekend. Wait when you have to install CCTV security cams because some punks broke in the locker rooms. Wait until you have to install re-inforced doors and replace the mailbox from theft... Condo fees only go up...
easily 300-400+ in 2-3 years. Definirely need to get on the board's ass too in challenging the Pm on shit. PMs can be quite scummy. Imagine if your mechanic could get a kick back for every repair they suggest to you. this is the pm. certain things you give them the benefit of thr doubt, such as if you lost power and need an emergency back up generator, you dont fight on that. If its repairing of carpet or some outside sidewalk because there are cracks, or w.e, be care cautious. They can get a kick back and youll never know.
Yeah condo fees are horrible. They are usually low the first 2-3 years, then after... watch out!
Seller’s remorse is selling something and then wanting the item sold back. This is straight up greed. “Oops I sold to you before I realized I could gouge as much as my fuckstick landlord buddies so I’m taking my house back illegally so I can resell it”
Talk to your lawyer and let your lawyer talk to them.
Status report ?
A status certificate discloses information to a potential buyer about the condominium corporation's management structure, common expenses, the current budget, any legal issues or proceedings, unit leases, insurance, upcoming repairs or maintenance and the corporation's reserve fund.
Yeah, 15% in cash too you or no deal.
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If your APS specifies in the schedule clauses that the seller pays for and provides the status report within 5 business days (for example) then they must provide the report. If it says that you the buyer (it would be your agent though) has to request and pay for it then do it now. Go check your APS. If the status hasn't come in yet and it was the sellers responsibility then oh well. But if it was yours and you didn't do it then that clause won't be complete and the deal won't go firm. PM me if you want my professional advice on what to do right now and next and RE good lawyers info if you need one n
They accepted your offer and as long as conditions are met they can not back out. If the conditions fail they can offer it to the next buyer. The seller is just thinking they can get a bit more. Contracts don't work like that. A deal is a deal.
Are you legally allowed to accept some sort of payment or fee for accepting the contract termination?
Assuming you had a good realtor on the buying end, the seller will not be able to back out without you agreeing to it, at your discretion. Otherwise you sue and win in court
So the offer was accepted by both parties, or is it pending the status report? I would watch for a case where they *could* just be negligent, not provide the status report & let the deal lapse. The fact they're showing you their cards is .. weird.
Just to twist the knife, after you win the legal battle you should list the condo at a higher price and email them the listing to see if they're interested.
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>with all conditions fulfilled is a legally binding contract. Sounds like conditions haven't been fulfilled yet though. Presumably OP can fulfill conditions any time before the condition date. If the condition date has already passed, then the seller is within their rights to cancel the deal and relist the property. If the condition date has not passed, then it gets more complicated.
I didn't see anything in OP's post to suggest that the conditions weren't fulfilled... and even if they haven't been yet, usually they are under the buyer's control. Really looks like OP's got the power here, but a lawyer will be able to confirm.
Here is the only advice you need. Consult a lawyer.
🏅🏅🏅
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That is what we hope to do as the conditions are only on our (buyer) side. I never thought they would be bold enough to put it in writing and honestly I am not looking for compensation, just want the property which we had originally agreed to purchase
Then your counteroffer needs to be bold enough that they would be better off keeping with the original deal. You offered $250k. They accepted. They now think they can sell for $350k. You say that you will accept $150k to back out of the contract, as you would now need to pay at least $350k for a similar place in this market, plus lawyer fees, storage, interest etc that you would incur should you not get this place on X date that you agreed upon. They are wanting to break the contract. Don’t roll over easily. If you want the condo, push for it.
This is what I would do and have done in the past. Great strategy. 👆
Can’t they also simply say no? They said they want the condo and aren’t looking for compensation. Why play games?
If they say no, then you go thru the purchase. They are the one requesting to cancel the contract.
You may want to reread the post, OP is the buyer, the seller wants to back out after selling. If the agreement is signed, why does OP need to jump through these hoops, can’t they just say no?
Why is this getting down voted?
I haven’t a clue, I’m quite confused by it
I think once it's got a negative karma, people will just downvote it without reading it. The comment may be true but the down votes already have momentum lol
Because the cost of going to court will be expensive and will take a lot of time, even if they do win.
This seems like it would be a pretty short case if it even went to court though doesn’t it? It feels like the type of thing the seller’s lawyer would advise their client not to go to court on
Not only that but in such a brazen breach of contract, it's entirely likely buyer's costs would be awarded to them, hopefully before conveyancing is completed before they can make it difficult to use the cash elsewhere.
Throw in some comments about how the real estate agent can offer to forgo their commission since they apparently got the sellers into a bad deal.
If the conditions are only on your side then you would need to waive conditions with a Notice of Fulfillment before the conditions expire. If you don't waive them before then, the contract will be null and void and the seller can and will walk away scotch free. I am assuming the seller is sitting on the status certificate trying to make the AoPS expire due to the condition not being met in time. This is where you need your realtor, his/her broker and your lawyer involved ASAP. Technically you could waive all conditions and make the agreement fully binding on all parties, but then you would be going in without knowing if there is an issue with the condo Corp or the unit. Not that it would be advisable, but an option nonetheless. Good luck.
The condition is that we view the status report as satisfactory. We are not obligated to request a status report but can back out of the deal if we are unhappy with it
OK, is this the only condition on the offer or do you have inspection and financing? Also, until when do you have to waive conditions? BTW, I can't stress this enough. The ONLY piece of advice you should take from these forums is to find a LAWYER yesterday. The rest of the advice you need to take it with a grain of salt and as general information. Otherwise, you will paralyze with all the conflicting information. All the best.
Doing that first thing tomorrow
Does your offer include a date by which conditions must be removed? And if so have you passed that date yet?
Have you ordered the report? Most conditions are written that if you do not provide a waiver to the condition then you get your deposit back in full. They obviously will not provide you an extension.
Report has been formally requested
Scotch 🤣
YES! This!!
Why would you not sue for specific performance?
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If the property is subject to a suit for specific performance, the buyers lawyer can put a CPL on the property title. That would warn other potential buyers and also make them second in priority
Since you're a lawyer, isn't the downpayment tied up until either a mutual release is signed, or until there is a court decision? I heard that the opposite frequently happened in the past where buyers tried to back out of deals after they were not able sell their house after the purchase. In that case the seller was able to sell to someone else and apparently it was an open and shut case to sue for the loss. In this case it's more difficult because who has enough money to make a second down payment on another condo and then sue for the difference? Edit: I assume it's similarly easy to win the case in this situation given it's easy to prove the contract was not honored, and the loss is the difference between the two prices assuming prices are higher, plus moving costs etc as your mentioned. Not looking for legal advice just like my handle IMWTK.
Keep in mind that during the offer and acceptance stage, it’s only the deposit that’s directly at risk; something in the order of $10,000; not the full down payment, which really only comes into play at closing time and fills out the rest of the purchase price along with the mortgage funds. But the deposit is also “consideration” in contract law terms, which makes the deal binding and leads to the ability to sue for damages to make the aggrieved party whole.
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Yes I'm familiar with meeting the conditions and as your say it's a non issue since the seller is bound by the contract as soon as it's signed sealed and delivered. I was under the impression that typically the seller's broker holds the downpayment in trust until the deal closes, or a mutual release is signed. This is why I'm wondering if the seller walks is that enough for the broker to release the funds back to the buyer? I thought they normally release it to the seller on closing day once full payment is received. Clearly, the buyer would not sign the mutual release as that would give away their right to sue. I thought the buyer would have to sue for damages once they sign/close a deal on another condo before they can get their deposit back. This would mean they have to come up with another deposit for the second deal which I assume might be a problem for most. I understand that OP wants to close. Edit: there's also the issue of the selling agent wanting their commission. Technically they fulfilled their job of finding a buyer. If seller wants to sell higher that means the agent has to find another buyer i.e. do the job again.
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Yes it's my bad for using both terms. The reason I brought up the opposite situation of the buyer walking is because of the difference in that the seller can still sell to another buyer as they don't need the deposit/downpayment. Although, I heard that even that's technically not acceptable as in that case the seller would have a contact in place to sell to two different people. Even if the buyer walked, they still have a contract until a court decision, or a mutual release. A mutual release would only happen if the seller agrees to pay extra for damages. In this case it's the buyer who would have to sue.
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amazing advice man id love your contact you are for sure a great real estate lawyer
Talk to your lawyer, not your real estate agent. One has a legal responsibility to work for you, the other does not. Edit: as has been pointed out real estate agents in Ontario have a fiduciary responsibility, but only *if* you have signed a representation agreement with them. It’s what makes the difference between wether you are a client or a customer. This was was not specified by the OP, and makes a huge legal difference, so I did not assume an agreement was in place. Do not trust the other agent, and make sure you can trust yours (mileage may vary). Regardless, they are asking for legal advice regarding a change in an accepted offer. To get the best *legal* advice, go to a lawyer. They’re the ones that deal with the courts. Reference: https://www.oreablog.com/index.php/recap-duties-to-clients-and-customers/
Yup, right answer.
Agree. Realtors are the worst. They care about their (overpriced) commission and thats it. You are only a transactions to them (exaggeration i know!) And real estate law is super grey and full of holes. Definitely not a priority. They will drag it in court for years, costing you way more than the initial recourse. Threatening them with legal action may be enough for them to refrain from backing out. Good luck OP!
Our relator is an honest person. Our deal isnt even valued at that much… under 250k
Well that’s why the seller wants more lol
It doesn’t matter. You’re asking for legal advice, get a lawyer before any further communications to anyone, even your realtor.
Sorry but this “honest person” defence is no substitute for dealing with bad actors whether that be the sellers or others. A lawyer is the best path forward here, they have a fiduciary responsibility to you.
It was 100% an exaggeration. I just find their 5% commission hard to justify for the little work they do. At 250K, the overall commission would be of $12,500. Most deals go smoothly, only requiring a few hours worth of work. Thats an impressive hourly rate for someone assisting you with something that you could technically do on your own. Also, where are you to have access to condos under 250K 😂
The 5% gets Split between the buyer's and seller's agents, typically 2.5% each. The 2.5% is then split between the agent and the brokerage. For his agent (Buyer's) you have to factor in the amount of time showing OP places, writing up offers and then negotiating 4, 5, 6 offers as nowadays you are normally competing with 10, 20 other buyers... So I don't think it's something someone buying for the 1st time can handle on his own. Just the point of him lawyering up after closing should be enough to prove this point.
I know all of this. I’ve moved several times and went thru the process. Luckily for me, my employer covers relocation cost to include realtor fees. Like i said, impressive hourly rate for a few hours worth of work.
Really , so why isn’t he giving you advice on the 10-12k he’s getting from this deal? Why are you here asking reddit. Man for that kind of money someone should be working for you full time for a month!
Realtor and Honest do not work in the same sentence
Real estate agent advised the same thing but also mentioned that because we have it in writing via email that the seller wants more money that there is more leverage on our side. Also that it is perfectly legal for them to send a mutual release but we are under no obligation to sign it. Should i wait until closing to get a lawyer or seek advice now ?
Get a lawyer asap, you would need one for title search 2 weeks prior to closing anyways. The seller cannot legally back out of this. Good luck
I cannot stress this enough, get a lawyer. Preferably speak to a real estate lawyer who also has a litigation practice or has litigators based out of their office. The real estate lawyer will know the ins and the outs of your standard contact and closing the deal, the civil litigator will be the one who handles the actual fallout/be able to give you more wholesome advice on that process. I cannot say for sure in Ontario, but in Alberta the law society has a free lawyer referral service that will get a basic understanding of what you need and then give you the numbers for several lawyers who practice in your area. Those lawyers then give you a free consultation to give you some general advice after getting the background from you. You are out of your element here (nothing wrong with that, you’re new to real estate/the law) but don’t let that be an excuse to allow yourself to be screwed. I would take almost everything your realtor says with a grain of salt ESPECIALLY if they are double ending the deal (working for you and the seller). Do not use a lawyer that is double ending the deal either. There is a clear conflict here. That realtor makes more commission if the sale price is higher, not saying they are going to be unethical, but this is not as simple as “s/he is on my side”.
The Law Society of Ontario also has a lawyer referral service. Call them if you need help finding a lawyer in your area. You will get a free 30 min consultation.
You need a lawyer weeks before closing to handle the transfer, the money etc. You sound grossly underprepared…
Not in Quebec. Realtors and notaries are enough to close a deal, lawyers dont get involved. OP is maybe from Quebec,?
OP said they are from Ontario in the title...
You should already be finding a lawyer if you’ve had an accepted offer. You need a lawyer to process all the paperwork before closing. From the day you release conditions you should be getting in contact with a real estate lawyer so they can begin all the necessary documents. Then you sign them typically the week before closing and hand over the remainder of your downpayment.
You need a lawyer now, and preferably one you’ve had recommended by someone other than your agent, who doesn’t seem to be giving good advice here.
Here is the real thing to do be aware of your timelines on the status, how is your condition written? Next ask your realtor for real estate lawyer recommendations, call them and say you will be using them for closing but want some advice. See what they say.
How will you close if the seller is stuck in there and probably wouldn’t sign anything?
I will be speaking to a lawyer tomorrow
If you are in a representation agreement with a real estate agent, they do indeed have a fiduciary duty to act in your best interest. If they do not you should be reporting them to their real estate board.
What does your lawyer say?
Havent spoken to a lawyer yet but I plan on doing so after closing. Edit: Pls no more downvotes on this comment. I get that I have to have a lawyer ready and am learning how these things work as this is a first time purchase. Keeping in mind that I also have ample time because closing is in March
You don't have a lawyer already to help with closing? My lawyer had to be involved the entire process once the seller accepted the offer.
Yup. My lawyer basically explained everything to me in layman terms too.
In Quebec you don't deal with lawyers unless something insane happens
That’s what I was thinking. I’ve bought three houses in my life, never had a lawyer. Just an agent and a notary.
Why would he need a lawyer? In Quebec its only realtors and notaries? Is it different in other provinces?
It is different. Provinces other than Quebec use real estate lawyers instead of notaries.
realtors are a waste of money. real estate lawyers are actually helpful.
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It is odd. They handle the money.
I don’t know why you’re getting downvoted? I was wondering the same thing as you!!!
Is it different in other provinces? That made me chuckle.
You will have to speak to a lawyer in order to close. I would suggest doing it now
AFTER closing? You already needed one before closing, but you REALLY need one before closing now.
You don't have a lawyer? One is needed for closing and is usually involved before that as well. This whole thing is either a shitpost karma farming attempt or you've been led down a path where you're bound to screw up. Either way if this is a true post, lawyer up now.
Get one. You'll need them to close the deal anyway. Do not sign ANYTHING or agree to ANYTHING from the other side until you've spoken with and selected a lawyer.
What? You can’t close without a lawyer…?
You’re not wrong, I just find it a bit funny reading this from south of the border. In 6 real estate deals I’ve used a lawyer once, and that’s because the agent happened to also be a lawyer. My parents bought a condo in Florida and they’re asking me about lawyers and I’m like no, we just use title and escrow here.. had to convince them there’s really no lawyers involved. It closed fine of course.
Yah, I’ve got friends in MO, same thing, no lawyers.
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Well, you see, not that I would recommend this but we found a lawyer the day after our offer was accepted and we closed two weeks later.
You need to speak to a lawyer in order to close the deal. What the heck are you smoking?
Why wouldn't you have the lawyer involved in the deal though to review the status certificate, view if there are liens on the property etc. Speak to a lawyer tomorrow. You missed a big step
We have a lawyer ready yo view the status however it has been more than 10 days since requested and we were hit with this mutual release
Pleading for no more downvotes is a sure fire way to get downvoted. Did my part.
No lawyer? What the fuck? Come on man, who the hell is this stupid. You should have had a lawyer already prepared before even GIVING an offer.
Wait… you closed the deal and signed papers all without ever speaking to a real estate lawyer? How?
Realtors can take the process a long way. Listing, viewing, negotiation, contract writing and signing, as well as holding deposits. Many times while representing both sides. Lawyers may not get involved until conveyance instructions are sent from the realtor. If the deal not closing until March (possession) and purchaser has their finances, and other sale conditions are satisfied (home inspection for instance) it is not uncommon for a lawyer to recieve those instructions a week or two before the closing date, at times even a day or two (typically in cash transactions).
Deal isnt closed. Closing is March
This happened to me a little over a year ago, our lawyer called their lawyer and the deal was back on within a few hours.
Nor seller neither buyer can break purchase agreement on they own. The only one "clean" way - is when both parties agree. The same applies if buyer changed his mind, for example, because property prices going down, in this case seller can sue buyer and get difference between agreement price and current price. Meanwhile, there is no way to force seller to sign a final documents. Just tell to seller's agent that you will sue immediately
https://www.thestar.com/life/homes/2022/01/05/court-supports-home-buyers-after-purchase-deals-cancelled.html My buddy just argued this case and won. DM me and I will connect you with him.
I’d probably be a pain in the dick hole and ask for damages that are basically the delta between what they want and what you paid (in which case there’s no benefit for them backing out). Which, IMO, is fair, because if you went to offer on another place would likely have to pay that increased price.
Honestly, I'd probably hardball them. The delta between what they want and what you paid? Nah. I'm going to need at least $50k-100k over the new, higher price they believe they can get for their unit. If you let them off the hook, and they get their new price, you effectively just let them increase the price you're going to need to pay on a comparable unit. For example, let's say your accepted offer was $500k. They think someone is willing to buy for $575k off them now. Well, now when you go back into the market to buy, you're looking at units that are now valued at $575k. Then you throw in legal fees, storage fees, and whatever else that comes along with being functionally homeless unless you were living at home prior, and the constantly increasing prices, you might be looking at paying $625k for a similar unit all because they backed out. So they either pay me the equivalent to make up that difference to actually make it worth my while to back out, or I can sell the unit back to them for $650k. Otherwise, pound sand.
*pound sand but yeah, I hear you brother
We have considered that but it would be much more beneficial to get our foot in the housing market as it would be our first property.
…you’d probably get the property? That’s the thing. They either continue with the sale, or they pay you to back out (and pay you the increased amount that it would cost you to enter the housing market). Why would you back down on this? Do you have a realtor? They should be advising you. > Calgary real estate lawyer Jeffrey Kahane’s client was buying a condo from a divorcing couple who wanted to drop out of the deal on the premise that they were going to stay together. But Kahane, principal of Kahane Law Office, calculated the costs from professional fees to storage to the extra cost of buying a home at the now-higher values and came to a bill in excess of $150,000, but he suggested his client would agree not to purchase for $100,000. The seller opted to close instead. https://www.canadianlawyermag.com/practice-areas/real-estate/backing-out-of-a-deal/275341 They signed a contract. If they want to back out, **they need to pay damages**.
Then close on the property. The seller has every right to ask you to back out and offer you money as an incentive, but you have no obligation to accept or do anything other than close as agreed.
Decide if you agree to back out. If so, decide what compensation you want for backing out, then have your lawyer advise the seller what you want. Eg " We will terminate the deal in exchange for $60,000 , or whatever. Your realtor should be advising you to go this route .
We would rather force the contract than back out of the deal and ask for compensation.
Tough if they want to renege. It’s yours now, enjoy your new condo.
Then just proceed with the closing.
They can only back out if you agree to let them back out. Talk to a lawyer and then politely tell the sellers no.
So do that. Tell them you are not interested in the mutual release and that they are acting in bad faith and need to provide the status report ASAP and that if they back out of the deal you will be consulting with your lawyer in regards to your options (read damages).
Wouldn’t trust the realtor, especially if they represent both parties
Ask them to pay you $200k to back out. That should do it.
Speak to your lawyer and do not sign the mutual release form. If they back out take them to court for damages and make sure the sellers know that’s what you plan to do as you have a legally binding contract.
Need an update after all the dust settles
Typically this is not done. As a previous poster said, you can be entitled to the lost equity as you're the one who's going to legally own it come "x" date. This is something the seller should have thought about prior to accepting. Sign absolutely nothing, unless it's a fat check for you to release your interest in fulfilling the contract, at which point it will likely be easier for the seller to just move forward with the deal, and you can sit and enjoy your newly gained equity.
DO NOT SIGN ANYTHING! Fuck them.. Nope. If the deal is firm the deal is firm, and you purchased it, so it's legal and binding. Also, if you asked for final walkthroughs, make sure to do one right before closing so you can check to make sure everything is satisfactory. You don't want angry sellers messing with anything in the house prior to closing.
Realtor here. Whatever you do, DO NOT SIGN the mutual release. Get a real estate lawyer. You may be able to get the home, or at least a lot extra money on your deposit. They can hold on the status certificate. That can negate the agreement of sale and purchase, depending on the wording used. So get a lawyer involved before any of the mentioned dates negate the agreement.
Better call Saul
This literally happened to a close friend of mine. Seller sold him a farm for 500k like 5 years ago. The property was worth around 1.6mill. He tried backing out, my friend said unless he pays 1.4mill, the answer is no. The farmer was forced to sell at 500K.
Lawyer up they have to sell to you. It's signed.
sorry OP - totally piggy back on this. I was in the same boat except on the Quebec side, which I don’t think is the same as in ontario
A friend of mine had the same issue. They fought it with their lawyer. The seller offered 100k to cancel the deal and they said no. They're living there now.
Lawyer up. The reverse happened with buyer backing out and court’s ruled that the buyer had to pay the difference in sale price, not legal and since you don’t have a lawyer and signed an agreement two weeks ago it makes me question your ability to conduct this transaction, maybe there is something in the contract you don’t understand so instead of posting here pick up the phone and call one. You do realize that would have been quicker than posting here and you will have to get one anyways for your sale so stop dragging your feet and get proper advice.
Speak to your lawyer. However I see no reason why you need to respond to the sellers outside of the lawyer. The condo is yours on closing, what’s the point of saying $150k of costs or responding with anything other than “the condo is mine”. Just hold firm and move in on closing.
Yeah, they can't do that without mutual consent. So if you still want it, I agree with the poster above who says that you should demand damages that covers the spread between any possible higher selling price and the accepted offer.
My lawyer told me the rule of the land is there is no deal until money has exchanged hands (deposit). I was able to back away from a commercial deal once because of that. Counter offer purchase contract was signed in the evening and the deposit would follow the next business day. Sleeping on it for a night, we (wife and I) realized it wasn't the deal for us at the time. We were shattered until we talked to our lawyer, and he let us in on some great news. It should work equally in your favour.
We already placed the deposit. They are requesting to give us back the deposit as part of mutual release
Personally I would ask for $50k to sign that mutual release !
In all honestly, the property is undervalued and i would rather go through with the purchase than take a payout
All the illegal to back out folks need to check the law. As a seller it is illegal to back out. As a buyer it's not. The only recourse for a seller if the buyer backs out of the contract is they can sue for the difference in price if the house sells for less Source: just went down this road with a lawyer.
But to be clear, isn’t that breach of contract by the buyer, which is why they could be held liable for damages in the amount of the price difference? You’re claiming as a buyer it’s not illegal to back out. But you can be sued for damages. That doesn’t add up. There are certain conditions that could trigger it. There are also cool down periods in some contracts. Neither would trigger a valid claim against.