Real Estate

Buyer's Signed Agreement with No Conditions, But Walked Away Prior to Delivering Deposit

  • Last Updated:
  • Jul 10th, 2020 1:04 pm
[OP]
Sr. Member
Nov 30, 2009
657 posts
181 upvotes
Toronto/Mississauga

Buyer's Signed Agreement with No Conditions, But Walked Away Prior to Delivering Deposit

We've been faced with a situation where our buyers signed an agreement with no conditions other than a lawyer reviewing the status certificate. Prior to them delivering the deposit, they decided to walk away from the deal saying that they have issues with financing (which was not a condition) despite being pre-approved. Can they simply walk away? What course of action can I take on it? Since they never delivered the deposit, they seem to think they have nothing to lose.

Update: In the end our agents worked together and the buyers came though with the agreement, delivered the deposit and fulfilled their status certificate review condition. Contract is now firm.
Last edited by DRGN89 on Jul 10th, 2020 10:44 am, edited 3 times in total.
118 replies
Deal Addict
May 23, 2006
1528 posts
557 upvotes
Vancouver
It's a breach of contract, so you can sue them for your loss (if any). For example, if the price has actually declined from the purchase price (if you have evidence), you can sue them for the shortfall.
[OP]
Sr. Member
Nov 30, 2009
657 posts
181 upvotes
Toronto/Mississauga
Fantastical wrote: It's a breach of contract, so you can sue them for your loss (if any). For example, if the price has actually declined from the purchase price (if you have evidence), you can sue them for the shortfall.
How is the process? Is it worth the time, money, and effort?
Deal Guru
User avatar
Mar 23, 2008
13006 posts
9961 upvotes
Edmonton
DRGN89 wrote: How is the process? Is it worth the time, money, and effort?
Kind of depends (a lot) on how large your damages are. If you turn around and sell it next week for the same amount or more than they agreed to pay, suing them would be pointless. If you have to sit on it for 6 months and end up selling for $100k less than their agreed price, then you’ll want to talk to a real lawyer and not an anonymous Internet forum.

C
Jr. Member
Sep 13, 2007
148 posts
184 upvotes
toronto
CNeufeld wrote: Kind of depends (a lot) on how large your damages are. If you turn around and sell it next week for the same amount or more than they agreed to pay, suing them would be pointless. If you have to sit on it for 6 months and end up selling for $100k less than their agreed price, then you’ll want to talk to a real lawyer and not an anonymous Internet forum.

C
This. OP talk to a lawyer and seek their professional advice.
Deal Expert
Feb 29, 2008
19086 posts
17424 upvotes
Tarrana & The Ri…
Really annoying to see buyers pull this crap and the a-hole in me feels in a perfect world they would lose their deposit. It's simple, if you're the type to get cold feet or are not 100% certain then put a financing clause or just don't make an offer. I hate to read stories like this.
[OP]
Sr. Member
Nov 30, 2009
657 posts
181 upvotes
Toronto/Mississauga
JayLove06 wrote: Really annoying to see buyers pull this crap and the a-hole in me feels in a perfect world they would lose their deposit. It's simple, if you're the type to get cold feet or are not 100% certain then put a financing clause or just don't make an offer. I hate to read stories like this.
My wife and I are really irritated at this point, because we had a previous agreement which the buyer had a financing condition even though they said they spoke to the mortgage broker and was able to come up to an agreed upon price and then they walked away saying that they couldn’t get a low enough fixed rate to afford the purchase. Now we have these new buyers who had no financing clause thinking they can walk away because they didn’t deliver the deposit. My thought is that they put in an offer to hold our property and went to look at other ones the next day and found something else they wanted and decided to pull out on our deal.
Sr. Member
Jul 15, 2019
701 posts
565 upvotes
CNeufeld wrote: Kind of depends (a lot) on how large your damages are. If you turn around and sell it next week for the same amount or more than they agreed to pay, suing them would be pointless. If you have to sit on it for 6 months and end up selling for $100k less than their agreed price, then you’ll want to talk to a real lawyer and not an anonymous Internet forum.

C
Couldn't they still sue for the deposit in this situation regardless though? Due to them signing the agreement, and walking away should have them still owe the deposit. Meaning even if they recoup their losses on the sale a deposit is owed.
[OP]
Sr. Member
Nov 30, 2009
657 posts
181 upvotes
Toronto/Mississauga
Even though these buyers are in breach of the contract, my agent is telling me we won’t be able to sign acceptance on any new submitted offers unless a mutual release of the previous contract is signed by all parties. Can anyone advise on this?
Sr. Member
Dec 23, 2012
504 posts
499 upvotes
RICHMOND HILL
DRGN89 wrote: Even though these buyers are in breach of the contract, my agent is telling me we won’t be able to sign acceptance on any new submitted offers unless a mutual release of the previous contract is signed by all parties. Can anyone advise on this?
A lawyer
[OP]
Sr. Member
Nov 30, 2009
657 posts
181 upvotes
Toronto/Mississauga
Mosho1 wrote: A lawyer
I understand that I should talk to a lawyer and I will. I just wanted to know if anyone had any experience in dealing with this so I can know what to expect.
Deal Addict
Jun 7, 2017
1043 posts
832 upvotes
BC
Let it go. Get on with your life.
[OP]
Sr. Member
Nov 30, 2009
657 posts
181 upvotes
Toronto/Mississauga
Furcorn wrote: Let it go. Get on with your life.
I have no problems letting it go if I can sell my condo for the same price. How would you simply let it go if it ends up selling $10-$20K less than the initial agreement? Why would I simply let it go if they obviously are acting in bad faith?
Deal Addict
May 23, 2006
1528 posts
557 upvotes
Vancouver
You have to prove your loss as a result of the breach of contract.

For example, if you are rejecting another offer because of your acceptance of that offer, you obvioulsy have a loss.
I am guessing you don't have another offer and real estate price hasn't really changed much at this point.....i am guessing your loss, if any, would be $10k or less....if yes, it's a grey area, and i think you just move on..... but you can talk to a real estate lawyer and get his thoughts to see is it worth pursuing.
DRGN89 wrote: I have no problems letting it go if I can sell my condo for the same price. How would you simply let it go if it ends up selling $10-$20K less than the initial agreement? Why would I simply let it go if they obviously are acting in bad faith?
Deal Addict
Jun 7, 2017
1043 posts
832 upvotes
BC
DRGN89 wrote: Even though these buyers are in breach of the contract, my agent is telling me we won’t be able to sign acceptance on any new submitted offers unless a mutual release of the previous contract is signed by all parties. Can anyone advise on this?
No, they are in breach. They have no role to play now.
Sr. Member
May 13, 2012
728 posts
331 upvotes
Toronto
Furcorn wrote: Let it go. Get on with your life.
This
Market is in good condition still.
If you really want to be compensated, ask your lawyer to let the other party know you will come to an agreement to dismiss the deal with $x amount of dollars as some sort of penalty
Who knows, you may get more money for your condo.
If you have the energy and time to teach them a lesson, do it otherwise spend your time and energy on more positive things
Deal Expert
Feb 29, 2008
19086 posts
17424 upvotes
Tarrana & The Ri…
Utter BS that they can just get away with it. Good to know I can just bid on 5 houses and just walk away from the ones I don't decide to follow through with.
Deal Expert
User avatar
Oct 26, 2003
37376 posts
5239 upvotes
Winnipeg
JayLove06 wrote: Utter BS that they can just get away with it. Good to know I can just bid on 5 houses and just walk away from the ones I don't decide to follow through with.
I put offer for house before and each time requires a deposit in order to make the offer valid, condition or not, so it is strange for the offer or bid to even get recognized in the first place without a deposit, is this how things work in GTA?
WTB amazon gc @90%
Deal Fanatic
Mar 15, 2005
5723 posts
1294 upvotes
divx wrote: I put offer for house before and each time requires a deposit in order to make the offer valid, condition or not, so it is strange for the offer or bid to even get recognized in the first place without a deposit, is this how things work in GTA?
Typically you submit offers for the house, including the size of the deposit.

Once the agreement has been accepted by the seller you typically have around 24 hours to transfer the funds to their brokerage or the agreement is scrapped. You can get extensions but those would need to be mutually agreed to.
Sr. Member
May 13, 2012
728 posts
331 upvotes
Toronto
Ziggy007 wrote: Typically you submit offers for the house, including the size of the deposit.

Once the agreement has been accepted by the seller you typically have around 24 hours to transfer the funds to their brokerage or the agreement is scrapped. You can get extensions but those would need to be mutually agreed to.
I guess the offer was not finalized with a deposit thus the contract was never valid. It’s not common that this happens but if the buyer “fails” to deliver the deposit, it’s not a completed offer unless else is stated

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)