Real Estate

Condo buyers backing out on conditional sales

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  • Sep 6th, 2020 3:43 pm
[OP]
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Jan 5, 2020
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Condo buyers backing out on conditional sales

I've been noticing quite of few condos in my neighborhood that have been sold conditionally but don't get closed and then end up back on the market.

I'm assuming it may be due to financing issues from the buyers. Are banks becoming more stringent with mortgage approvals? Am I the only one with this observation?
15 replies
Newbie
May 26, 2020
9 posts
7 upvotes
Toronto
Yes, banks have less appetite for the condos than the freeholds..I've worked with a few buyers where Banks want a 're-appraisal' on the day or day before closing.
Toronto Real Estate Salesperson
Chartered Professional Accountant
[OP]
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Jan 5, 2020
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SeanBh93 wrote: Yes, banks have less appetite for the condos than the freeholds..I've worked with a few buyers where Banks want a 're-appraisal' on the day or day before closing.
Is this happening more frequently now? So banks are more reluctant to finance condo purchases now?
Newbie
May 26, 2020
9 posts
7 upvotes
Toronto
Newuserid wrote: Is this happening more frequently now? So banks are more reluctant to finance condo purchases now?
Don't quote me.. but from what I am hearing from some of the mortgage brokers I am work with, some Banks are looking to lessen their concentration with their product mix. I still do believe that if you qualify for the purchase in the end in won't matter but freeholds are definitely more where they are looking to grow their books. But this could very well be my own bias and not representative of the entire market
Toronto Real Estate Salesperson
Chartered Professional Accountant
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Mar 2, 2017
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Toronto/Markham
I don't think this is as much about freehold vs. condos as it is about qualified buyers. It's also possible people are walking away from deals and are taking on the liability of a lawsuit because they are getting cold feet with the mounting downward price pressure with many condo units.
Realtor®
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Jul 3, 2007
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Toronto
Newuserid wrote: I've been noticing quite of few condos in my neighborhood that have been sold conditionally but don't get closed and then end up back on the market.

I'm assuming it may be due to financing issues from the buyers. Are banks becoming more stringent with mortgage approvals? Am I the only one with this observation?
status certificate issues everywhere....
Deal Addict
Feb 19, 2019
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Stouffville ON
joepipe wrote: status certificate issues everywhere....
That's not the case, I look at a lot of them and would say about 90% are in good shape.
Full Time and Full Service Realtor
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Feb 29, 2008
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Tarrana & The Ri…
OP give examples.
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Sep 8, 2007
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Way Out of GTA
Sounds like a thread to spread anecdotal fear without anything substantive to back it up.
[OP]
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Jan 5, 2020
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cartfan123 wrote: Sounds like a thread to spread anecdotal fear without anything substantive to back it up.
You're right that I have nothing substantive to back up my observations. It is just an observation that I may be completely wrong about which is why I am asking. I am not trying to spread any fear.
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Mar 23, 2008
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Edmonton
Newuserid wrote: I've been noticing quite of few condos in my neighborhood that have been sold conditionally but don't get closed and then end up back on the market.

I'm assuming it may be due to financing issues from the buyers. Are banks becoming more stringent with mortgage approvals? Am I the only one with this observation?
Maybe it’s uninformed buyers making offers without a realtor to guide them...

C
[OP]
Deal Addict
Jan 5, 2020
1014 posts
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CNeufeld wrote: Maybe it’s uninformed buyers making offers without a realtor to guide them...

C
LOL come on C. Let's not go there. For a while I thought you were a neutral party but clearly you're not.
[OP]
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Jan 5, 2020
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JayLove06 wrote: OP give examples.
I can't give any examples as MLS does not keep track of conditional sales that don't end up becoming firm. Only actual sales are kept track.

Maybe I'm wrong since nobody else seems to have noticed anything.
Deal Expert
Feb 29, 2008
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Tarrana & The Ri…
Newuserid wrote: I can't give any examples as MLS does not keep track of conditional sales that don't end up becoming firm. Only actual sales are kept track.

Maybe I'm wrong since nobody else seems to have noticed anything.
I haven't been keeping track since Bungol has been out of commission. I'd say before there weren't a lot of deals with conditions just based on the nature of the market. But now I'm sure there are more conditions on financing showing up on offers so that could explain why there may be more deals falling through.
Deal Fanatic
Dec 20, 2018
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Newuserid wrote: I can't give any examples as MLS does not keep track of conditional sales that don't end up becoming firm. Only actual sales are kept track.

Maybe I'm wrong since nobody else seems to have noticed anything.
Sales fall through all the time if offer has conditions. I've seen it for ground related products even during the current surge be it financing costs or inspections

And condo sales have conditions moreso than freehold because of the status certificate the seller needs to get and reviewed. If only freehold had such a requirement as well it'll be so much better instead of just buyer beware

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