Real estate transactions go through as planned in the vast majority of cases. Occasionally, a slight hiccup can demand some quick thinking and creative solutions. A transaction falling through and having to start over from square one is fortunately rare.

However, we have seen it all, especially as the Toronto real estate market becomes more challenging to negotiate. In this post, we’ll address some of the setbacks that can happen and what to do to prevent them in the first place.

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A Buyer Tries to Back Out

Real estate transactions are legal contracts that leave very little wiggle room for either party to change their minds. The main reason a sale or purchase might not go through is because of a condition in the offer that gives a buyer a legitimate reason to back out.

Placing conditions protects the buyer, but can be stressful for the seller. This is why many sellers often favour unconditional offers, sometimes even at a lower dollar amount. The reassurance of knowing the transaction will close and you can move on to your next steps with minimal stress and hassle can be worth the concession. That said, an unconditional offer doesn’t always materialize, particularly in a slower market where buyers have options.

A Contract Is a Contract

What if there were no conditions and the buyer still tries to back out? You might wonder what happens if they find another home they like better or something for a lower price in a different neighbourhood. However, rest assured that a signed real estate agreement is a contract. It’s not easy to get out of just because one party wants to change their mind after the fact.

If your buyer tries to back out, you might be able to take them to court to force them to continue with the transaction or at least cover the difference if you end up selling for a lower amount. It is your right, but it isn’t always the best course of action.

During a fast market, it may be better to cut your losses and find another buyer. On a positive note, there’s a very good chance you’ll be able to keep the deposit if the buyer doesn’t hold up their end of the agreement.

If you’re planning on selling your Toronto home, the posts below will help you make your listing stand out:

When Conditions Aren’t Met

As a seller, you might have minor cause for concern if you’ve accepted a conditional offer. The most common clauses are Condition of Home Inspection, Condition of Financing, and Condition of the Sale of Existing Home. It’s understandable that the buyer wants to protect their own interests. Nevertheless, it can be stressful for you when you’re also searching for your next home.

If any agreed-upon conditions aren’t met, the deposit goes back to the buyer, and your listing goes back on the market. Fortunately, there are ways you can increase the odds of the transaction closing as planned.

A local real estate expert can guide you through the negotiation process to see if a buyer will be willing to drop some of their conditions. Getting a pre-listing inspection before putting your house on the market could make people more confident in placing an offer.

You can show that any necessary repairs have been made and that the house is move-in ready. If financing is an issue, the buyer could get pre-qualified for a mortgage, which would make a condition of financing unnecessary.

Keep in mind that a buyer can place as many conditions as they want when placing an offer on your home. Whether or not you entertain the deal can depend on how busy the market is and how many competing listings are in your area. If you do accept conditions, you’ll need to do your part in making any agreed-upon repairs or upgrades before the closing date.

A skilled professional can help you avoid any issues before they begin. Here’s How To Find The Best Midtown Real Estate Team.

What If the Seller Changes Their Mind?

What if you’re the buyer and the seller changes their mind? This is another rare scenario, but seller’s remorse is not unheard of, especially if prices rise significantly after they’ve accepted your offer.

It’s less talked about, but the seller also has the right to request contingencies of their own before a transaction can be finalized. For example, they might add an escape clause to get out of an agreement if a better offer comes in. Escape clauses are generally limited to 24 to 48 hours. If this happens, you can either remove your conditions or move on to another listing.

Once both parties reach an agreement and meet all conditions, it’s unlikely that a seller or buyer can back out of a transaction without consequences. Clear communication and negotiations can help ensure all parties are on the same page and no last-minute issues arise to interfere with the transfer of ownership.

What should you look for when buying Midtown Toronto real estate? The posts below will give you a few ideas:

Why a Clean Offer Is Critical

Whether buying or selling, it’s important that all contracts are as clean and well-thought-out as possible. It’s a show of good faith, and the transparency stops the transaction from being more complicated than it needs to be. Each party should be mindful of any clauses in the agreement.

  • As the seller, be sure to follow through if you’ve promised to leave any inclusions, remove old appliances or furniture, or make any repairs before handing over the keys.
  • As a buyer, review the terms of your offer carefully with your real estate agent so you have realistic expectations when taking possession of your new house.

By holding up your end of the agreement and understanding your rights and obligations, there is not much that can stand in the way of a successful home sale or purchase. Due diligence from everyone involved will help create a positive experience for both the buyer and the seller.

Do you want expert guidance when buying or selling in Toronto? Our Midtown Toronto real estate team is happy to help you every step of the way. Reach out to us at david@batorigroup.com, bobby@batorigroup.com or call (416) 485-7575 to learn more.