Real Estate

Examples of people just walking away from their deposits and not closing.

  • Last Updated:
  • Sep 21st, 2017 6:42 pm
[OP]
Penalty Box
Aug 11, 2005
3302 posts
646 upvotes

Examples of people just walking away from their deposits and not closing.

Seems we are seeing tons of these situations and more and more people have realized that they bought at the peak and are walking away from their deposits. Let's post examples here for those non believers!

98 Larksmere Crt Markham

Sold in March for 960k: http://watch.ohmyhome.ca/#/mls/N3724954
Buyers walked away and resold for 850k, a drop of 110k or 11%: http://watch.ohmyhome.ca/#/mls/N3833407

Any guess on whether it will close now or will the second buyer walk away as well as the market continues to tank?
233 replies
Sr. Member
User avatar
Mar 11, 2011
537 posts
152 upvotes
Toronto
Can't the sellers sue the buyers who walked away for their 110k loss?
Sr. Member
Aug 19, 2016
688 posts
234 upvotes
Houses are so cheap now (at least the listed price). Is there any catch? I mean, if they listed as $700k, and I put in $700k as an offer, I will get rejected?
Newbie
User avatar
Apr 5, 2017
58 posts
49 upvotes
46jimbo wrote:
Jul 15th, 2017 1:15 pm
Can't the sellers sue the buyers who walked away for their 110k loss?
The sellers can sue for their depreciation in the sale price plus holding costs. Issue is some people don't want to dish out $40k in legal fees to obtain a judgment that may not be enforceable against the originals buyers lack of assets.
Lawyer @ Law Booth Real Estate Lawyers & Notaries
Penalty Box
Nov 18, 2014
662 posts
547 upvotes
Toronto, ON
46jimbo wrote:
Jul 15th, 2017 1:15 pm
Can't the sellers sue the buyers who walked away for their 110k loss?
.
I'm actually a lawyer so I'll answer this

Theoretically yes. In the real world, it never happens. Suing someone takes over a year and costs up to 50k up front. With no guarantees that you will recover all the fees.

In order to sue someone, you'll have to.

1) Hire a lawyer and put him to work (10-15k worth of work)
2) Review the notice of defense (5k worth of work)
3) Attend a discovery (5k worth of work)
4) Mediation (5k worth of work + mediator fees split)
5) Court (5k worth of work)
6) Appeals if necessary (5-10k)
7) Collecting money if there is any left

I forgot to mention that any back and forth emails and correspondences quickly add up at $300 an hour.

As you can see, there's a huge investment and barrier to suing someone, with no guarantees you will get back what you are suing for. It's also very difficult to prove the exact amount of loss from a sale and you risk being sued for partial expenses if you lose your case. Even if you do win, you will not recover 100% of your expenses, only a portion. Since hte process is so long and time/money consuming, stats have shown that over 90% of the cases do not make it to court and are settled or dropped.
Last edited by rkanwar109 on Jul 15th, 2017 1:27 pm, edited 1 time in total.
Penalty Box
Nov 18, 2014
662 posts
547 upvotes
Toronto, ON
CollegeGraduate wrote:
Jul 15th, 2017 1:17 pm
Houses are so cheap now (at least the listed price). Is there any catch? I mean, if they listed as $700k, and I put in $700k as an offer, I will get rejected?
it will get even cheaper. Many people are running for the exits now.
Sr. Member
Aug 19, 2016
688 posts
234 upvotes
rkanwar109 wrote:
Jul 15th, 2017 1:27 pm
it will get even cheaper. Many people are running for the exits now.
As a priced out renter, I am desperately in need of a house lol.
Newbie
May 2, 2017
50 posts
41 upvotes
When the housing prices keeps going up, sellers won't sue for the depreciation.
When the housing prices drops a lot, seller definitely will sue for the depreciation!!!!!
Sr. Member
Aug 19, 2016
688 posts
234 upvotes
Calvin140 wrote:
Jul 15th, 2017 1:36 pm
When the housing prices keeps going up, sellers won't sue for the depreciation.
When the housing prices drops a lot, seller definitely will sue for the depreciation!!!!!
In this case, the seller already know the cost of the legal fight and the possible gains. The seller might threaten but won't sue because the time wasted out weight the benefits.
Deal Addict
Jun 20, 2011
1360 posts
373 upvotes
VANCOUVER
rkanwar109 wrote:
Jul 15th, 2017 1:27 pm
.
I'm actually a lawyer so I'll answer this

Theoretically yes. In the real world, it never happens. Suing someone takes over a year and costs up to 50k up front. With no guarantees that you will recover all the fees.

In order to sue someone, you'll have to.

1) Hire a lawyer and put him to work (10-15k worth of work)
2) Review the notice of defense (5k worth of work)
3) Attend a discovery (5k worth of work)
4) Mediation (5k worth of work + mediator fees split)
5) Court (5k worth of work)
6) Appeals if necessary (5-10k)
7) Collecting money if there is any left

I forgot to mention that any back and forth emails and correspondences quickly add up at $300 an hour.

As you can see, there's a huge investment and barrier to suing someone, with no guarantees you will get back what you are suing for. It's also very difficult to prove the exact amount of loss from a sale and you risk being sued for partial expenses if you lose your case. Even if you do win, you will not recover 100% of your expenses, only a portion. Since hte process is so long and time/money consuming, stats have shown that over 90% of the cases do not make it to court and are settled or dropped.
Is there such a thing as working on contingency for such cases? I know there are for accident/injury. Thanks in advance for your answer.
Deal Addict
Jun 20, 2011
1360 posts
373 upvotes
VANCOUVER
CollegeGraduate wrote:
Jul 15th, 2017 1:29 pm
As a priced out renter, I am desperately in need of a house lol.
You'll be fighting with the people with tons of money waiting to jump on deals.
Sr. Member
Aug 19, 2016
688 posts
234 upvotes
DDHLeigh wrote:
Jul 15th, 2017 1:46 pm
You'll be fighting with the people with tons of money waiting to jump on deals.
I will just wait for the fat pitch.
Deal Addict
Feb 22, 2011
1327 posts
1221 upvotes
Toronto
Luckyinfil wrote:
Jul 15th, 2017 12:56 pm
Seems we are seeing tons of these situations and more and more people have realized that they bought at the peak and are walking away from their deposits. Let's post examples here for those non believers!

98 Larksmere Crt Markham

Sold in March for 960k: http://watch.ohmyhome.ca/#/mls/N3724954
Buyers walked away and resold for 850k, a drop of 110k or 11%: http://watch.ohmyhome.ca/#/mls/N3833407

Any guess on whether it will close now or will the second buyer walk away as well as the market continues to tank?
Summer usually drops 5-7% I don't see a reaction of a 15 point government intervention being 11% in summer being all that dramatic.
Member
Jan 19, 2015
414 posts
443 upvotes
Scarborough, ON
DDHLeigh wrote:
Jul 15th, 2017 1:45 pm
Is there such a thing as working on contingency for such cases? I know there are for accident/injury. Thanks in advance for your answer.
Unless you are suing a big corporation for millions, all fees have to be paid upfront. In the case of accident suit, insurance companies pay millions.

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