Have you ever had a client throw their hands up and say, "🤬 it, they can keep my deposit"?
Lately, I’ve been seeing more deals teetering on the edge of collapse than usual 🤯 and buyers who are far too casual about thinking the deposit is the only thing at stake.
Here’s the hard truth…
The True Cost of Walking Away
A recent Ontario court case serves as a stark reminder of the risks involved in failing to close a real estate deal.
The Situation: A buyer agreed to purchase a property for $8.3 million but failed to complete the transaction.
The Outcome: The seller relisted the property at a lower price and sued the original buyer for the shortfall.
The Verdict: The court ordered the buyer to pay $1.83 million in damages.
This case underscores that buyers can be held responsible for much more than just their deposit.
Common Reasons Deals Collapse
One of the most frequent reasons deals fall through is unexpected financing issues.
👉 Case in Point:
A buyer of a new construction condo skipped pre-approval.
Thirty days before closing, they discovered they needed a 20% down payment and an additional $50,000 due to a drop in the property’s value.
Walking away wasn’t just about losing the deposit—it opened the door to a potential lawsuit for damages.
How to Avoid Losing the Deposit (or worse)
When financing delays threaten to derail a closing, these strategies can help manage the situation, protect the deposit and avoid law suits.
🤝 Negotiate an Extension
Communicate openly with the seller and request an extension early
This can provide extra time to resolve any delays without jeopardizing the closing.
💰 Offer an Additional Deposit
To show the buyer’s commitment and good faith consider sweetening the deal by offering an additional deposit.
This can reassure the seller of your intent to follow through.
⏱ Set Realistic Timelines.
Be upfront with the seller about long the financing issues might take.
Once broker conditions are met, it often takes 3-5 business days for the lender to issue mortgage instructions
It take a few days after mortgage instructions for the law firm to finalize the paperwork.
This approach can help you navigate financing delays while maintaining trust with the seller and protecting the buyer from financial loss.
Let’s Work Together 🤝
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