Buyer's Remorse

From our friend's at Zancope Notary Public in Langley, BC.  She sent me this great article that contain's important information for buyer's and sellers.

"In the past 15 days I personally dealt with 5 collapsing deals involving buyer’s remorse. For the first time in 6 years, I'm seeing people intentionally backing out and not completing their deals.

My perception is that people who have purchased properties between December and February are feeling that they have paid too much, and they believe that by not completing their purchase, they will only be losing their deposit. This is a myth!

As we know, after a real estate purchase/sale contract has been fully executed with at least $1.00 deposit paid, if one of the parts does not complete, the amount paid for the deposit will have nothing to do with the damages to be paid by the breaching party.

What are the consequences for not finalizing your real estate purchase?

• Your deposit will be frozen with the legal representative holding it, until parties reach an agreement or when court determines who gets paid what.
• Seller will be responsible to mitigate damages, by re-listing the property and trying to sell ASAP.
• Buyer that did not complete, could be responsible for:

1. All legal fees (their lawyer and seller’s lawyer)
2. Additional realtor’s fees for the work of re-listing the property and additional commissions paid
3. Any loss incurred by the seller - difference between the sale price they would have received from original buyer and what they were able to sell it for later.

For example: Original sale happened for $1Million. Buyer did not complete, and sellers listed again, selling for $700k. Original buyer (regardless of their deposit) could be responsible for covering the $300k loss from the sellers + all lawyer’s fees incurred by parties + additional commissions paid for the second sale.

Flavia will be doing a live event with a lawyer specializing in Real Estate litigation on Thursday, April 28th at 9am about this topic.