Putting your home up for sale can be a tough decision, but once made and the ball is rolling, you may not be able to change your mind. Last week’s column about a $3.3 million home sale that went wrong for the seller prompted several related questions from readers.
The system for closing real estate deals in Ontario is excellent: once Purchase and Sale Agreements become firm and binding, they rarely fall apart. This is different from the US, for example, where it is much more common for deals not to close. Even so, an Ontario Buyer or Seller will occasionally want to (or need to) back out of a deal. This article, together with the one from last week, neatly summarize when a buyer or seller can or cannot legally get out of a deal. In my experience the most common confusions and misconceptions concern deposits. Many believe that the deposit is automatically forfeited if the buyer walks away – not true, the Seller can sue for provable financial damages, which may be less than OR MORE THAN the amount of the deposit. Also, many believe that if the Buyer never submits a deposit he can simply walk away from a firm contract – again not true, if the contract is breached the Seller can sue for damages whether or not a deposit was received.