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
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Toronto/Mississauga
There is no where in the agreement that states the agreement would be null and void if the deposit is not delivered nor does it state that the offer is contingent on the deposit being received. It is considered a breach of contract.
Deal Addict
Dec 4, 2016
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DRGN89 wrote: There is no where in the agreement that states the agreement would be null and void if the deposit is not delivered nor does it state that the offer is contingent on the deposit being received. It is considered a breach of contract.
Wow. Sounds like an oversight by your agent. Now I have a scam I can teach at "get rich quick in RE" school: make offers without deposit on as many houses as possible, walk away from all of them, then wait for RE market to fluctuate. If prices go up, you flip the deposit-less contract for a tidy profit. If prices go down, you have already structured your finances to have nothing to garnish.
Deal Addict
Nov 10, 2018
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DRGN89 wrote: There is no where in the agreement that states the agreement would be null and void if the deposit is not delivered nor does it state that the offer is contingent on the deposit being received. It is considered a breach of contract.
This is not usually how it works.

If the deposit is not paid within 24 hours the agreement is not enforceable.

As usual there's a lot of wrong legal information provided on RFD.
For legal topics and discussions, the opinion, guidance, and thoughts provided are my own and are not considered to be legal advice, in any manner.
Deal Addict
Feb 24, 2008
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Mississauga
Wait...you accepted an offer without a deposit being included/offered/provided? There's no mention of an deposit dollar amount in your contract?
Sr. Member
May 13, 2012
730 posts
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Toronto
DRGN89 wrote: There is no where in the agreement that states the agreement would be null and void if the deposit is not delivered nor does it state that the offer is contingent on the deposit being received. It is considered a breach of contract.
Your lawyer will have the best advice. Hopefully you get this resolved and move on. I wish you the best whichever way it goes
BlueSolstice wrote: Wow. Sounds like an oversight by your agent. Now I have a scam I can teach at "get rich quick in RE" school: make offers without deposit on as many houses as possible, walk away from all of them, then wait for RE market to fluctuate. If prices go up, you flip the deposit-less contract for a tidy profit. If prices go down, you have already structured your finances to have nothing to garnish.
With such a high transaction costs, it would never make sense to do that.
[OP]
Sr. Member
Nov 30, 2009
675 posts
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Toronto/Mississauga
mau_mau wrote: Wait...you accepted an offer without a deposit being included/offered/provided? There's no mention of an deposit dollar amount in your contract?
There was a deposit included in the agreement that was to be delivered within 24 hours on the offer being accepted. They never delivered the deposit and are thinking this is a way for them to pull out of the deal.
Deal Addict
Nov 10, 2018
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DRGN89 wrote: There was a deposit included in the agreement that was to be delivered within 24 hours on the offer being accepted. They never delivered the deposit and are thinking this is a way for them to pull out of the deal.
It is, for all intents and purposes, a way for them to pull out of this deal. Even if you can prove they broke the terms of this enforceable agreement (which is laughable at best given the fact the deposit wasn't paid in trust) you will then have to convince a judge that the tort in question caused you some financial loss. You will then have to demonstrate that on a best effort basis you did not manage to sell the house for more than you agreed to with this buyer.

Move on.
For legal topics and discussions, the opinion, guidance, and thoughts provided are my own and are not considered to be legal advice, in any manner.
Deal Expert
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Oct 26, 2003
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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.
That is not how things work here, the deposit is a cheque that goes along with the offer. The realtor won't pass on my offer without a deposit cheque. In either case, no deposit is not a valid offer. I'm not sure how the buyer agent would deliver the offer and how the seller agent would allow the offer be accepted with no deposit, you would think the realtors have all this figured out by now.
Last edited by divx on Jul 6th, 2020 1:16 pm, edited 1 time in total.
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DRGN89 wrote: There is no where in the agreement that states the agreement would be null and void if the deposit is not delivered...
DRGN89 wrote: There was a deposit included in the agreement that was to be delivered within 24 hours on the offer being accepted...
Umm, so which one is it?
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DRGN89 wrote: There is no where in the agreement that states the agreement would be null and void if the deposit is not delivered nor does it state that the offer is contingent on the deposit being received. It is considered a breach of contract.
I think we have few realtor on the forum, I'm pretty sure agreement is automatically null and void without deposit, they can confirm.
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[OP]
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Nov 30, 2009
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funkutel wrote: Umm, so which one is it?
It's both. The agreement states that the deposit must be delivered within 24 hours of the offer being signed and accepted. Them failing to deliver the deposit does not absolve them of fulfilling the contract the way that I read it and from the information I've found online.

https://www.thestar.com/business/person ... osits.html

"Can the buyer get out of a deal by refusing to pay the deposit?

No. Once the deal is accepted, you can’t change your mind. If you do, the seller can sell the property again and if he gets less money than you were going to pay the seller can sue you for the difference, plus legal fees."
[OP]
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Nov 30, 2009
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divx wrote: I think we have few realtor on the forum, I'm pretty sure agreement is automatically null and void without deposit, they can confirm.
I assume it could be null and void should the seller choose to not follow through with the agreement. Again, how would this prevent any buyer from making multiple offers on multiple properties with the promise of a deposit and walk away from all but one?
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DRGN89 wrote: I assume it could be null and void should the seller choose to not follow through with the agreement. Again, how would this prevent any buyer from making multiple offers on multiple properties with the promise of a deposit and walk away from all but one?
Which is why agents here would not even pass on the offer without a deposit. In that case you won't even see the offer in the first place.
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[OP]
Sr. Member
Nov 30, 2009
675 posts
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Toronto/Mississauga
divx wrote: Which is why agents here would not even pass on the offer without a deposit. In that case you won't even see the offer in the first place.
Well the typical APS form reads per below and deposit upon acceptance is one of the options so the agent would have to present the offer either way.

DEPOSIT: Buyer submits ................................................................................................................................................................................... (Herewith/Upon Acceptance/as otherwise described in this Agreement)
..................................................................................................................................................... Dollars (CDN$) .......................................... by negotiable cheque payable to ............................................................................................................................. “Deposit Holder” to be heldin trust pending completion or other termination of this Agreement and to be credited toward the Purchase Price on completion. For the purposes of this Agreement, “Upon Acceptance” shall mean that the Buyer is required to deliver the deposit to the Deposit Holder within 24 hours of the acceptance of this Agreement. The parties to this Agreement hereby acknowledge that, unless otherwise provided for in this Agreement, the Deposit Holder shall place the deposit in trust in the Deposit Holder’s non-interest bearing Real Estate Trust Account and no interest shall be earned, received or paid on the deposit.
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divx wrote: That is not how things work here, the deposit is a cheque that goes along with the offer. The realtor won't pass on my offer without a deposit cheque. In either case, no deposit is not a valid offer. I'm not sure how the buyer agent would deliver the offer and how the seller agent would allow the offer be accepted with no deposit, you would think the realtors have all this figured out by now.
Perhaps this is region dependent. Here in Toronto, deposits are typically required up to 24 hrs after purchase agreement is finalized. With multiple offer scenarios on many homes, it's a hassle for buyers to get certified cheques for every offer they make when they may go through many of them before finally getting an offer accepted.

Also from what I understand if a buyer doesn't deliver the deposit within allotted time, only the seller would then have authorization to simply void the deal since buyer did not fulfill the deposit condition. However the deal is not automatically voided, the buyer is still legally obligated to the purchase agreement and seller can proceed to sue the buyer if they suffer any losses.
Deal Guru
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Mar 23, 2008
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divx wrote: Which is why agents here would not even pass on the offer without a deposit. In that case you won't even see the offer in the first place.
Most people don't walk around doing real estate viewings with $5k or more in pocket change. We haven't been house hunting for about 4 years now, but last time we placed offers 3 times, and in each time, we made the offer, and followed through on the next business day with a cheque for our realtor.

ETA: This was in Edmonton...

C
Last edited by CNeufeld on Jul 6th, 2020 2:12 pm, edited 1 time in total.
[OP]
Sr. Member
Nov 30, 2009
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rob444 wrote: Perhaps this is region dependent. Here in Toronto, deposits are typically required up to 24 hrs after purchase agreement is finalized. With multiple offer scenarios on many homes, it's a hassle for buyers to get certified cheques for every offer they make when they may go through many of them before finally getting an offer accepted.

Also from what I understand if a buyer doesn't deliver the deposit within allotted time, only the seller would then have authorization to simply void the deal since buyer did not fulfill the deposit condition. However the deal is not automatically voided, the buyer is still legally obligated to the purchase agreement and seller can proceed to sue the buyer if they suffer any losses.
Thank you. This is fully the way I understand it.
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Sep 2, 2009
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CNeufeld wrote: Most people don't walk around doing real estate viewings with $5k or more in pocket change. We haven't been house hunting for about 4 years now, but last time we placed offers 3 times, and in each time, we made the offer, and followed through on the next business day with a cheque for our realtor.

ETA: This was in Edmonton...

C
We had 24 hours as well (Ottawa)
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Jan 26, 2016
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Under common law a contract without consideration (deposit) is not a legally enforceable or valid contract.
[OP]
Sr. Member
Nov 30, 2009
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Toronto/Mississauga
WinterSleep wrote: Under common law a contract without consideration (deposit) is not a legally enforceable or valid contract.
The contract is signed with the consideration included with the promise to deliver the deposit within 24 hours. How does this allow the buyer to void the contract without mutual agreement from the seller just because they didn't deliver it. If this was the case then everyone would take advantage of this in real estate transactions.

Plus, in common law terms the term "consideration" means offering something in exchange for something else. So when you apply this to real estate, the consideration would be the buyers purchasing my property for X amount of dollars.
Last edited by DRGN89 on Jul 6th, 2020 3:28 pm, edited 1 time in total.

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