Not all buyers are as cautious as they should be when buying a home. Here is an example.
One buyer was moving back to the Niagara Region from Montreal where she owned a home. After some searching she attended an open house and found the Condo she wanted. The salesperson drafted the offer to purchase with three protective buyer conditions.
They were that the buyer be able to:
- Obtain a mortgage,
- Get a satisfactory home inspection, and
- Sell her home in Montreal.
No Mortgage Condition Needed Said the Friend
Before signing, the buyer wanted her friend and real estate salesperson in Montreal to review the offer. The Montreal agent insisted that the mortgage condition was not necessary and that it be removed before submitting the offer to the seller. He argued that the buyer’s Montreal home was practically mortgage free, highly saleable and worth much more than the Condo. Once sold the buyer would not need a mortgage for her purchase.
He also emphasized that there would be no problem. On the outside chance the Montreal home didn’t sell quickly, he could easily arrange the money if the buyer decided to remove conditions and proceed to close on the Condo. The buyer agreed with her real estate friend and directed the removal of the mortgage condition.
Overpriced, the Buyer’s Home Sat Unsold
The Offer was accepted and the buyer’s friend listed the Montreal home. He admitted the home was overpriced, but not to worry. The home would sell quickly. Yet within a couple of days of the condition of sale about to expire on the condo, the buyer’s house sat unsold. The buyer now asked for a 2-week extension on the sale. The Seller would only agree if the buyer removed her home inspection condition. The inspection was arranged, went well and the buyer removed the condition. The seller gave her 2 more weeks to sell her home; otherwise no deal.
Now Arranging the Money Was a Challenge
Two weeks passed and still no sale. The buyer now agreed to remove the sale condition and the seller agreed to extend the closing date by three weeks. Then arranging the money became a challenge due to an issue on the buyer’s credit report. After several attempts, and to the buyer’s displeasure, one lender agreed to provide closing funds at 1 ½% above the going rate.
The buyer’s home finally sold with a completion date 14 days past the condo closing. The lender now decided to withdraw closing funds because of documentation the buyer failed to provide. Friday came and went with no closing on the condo.
The lawyers and local REALTOR® had the buyer and seller agree to extend the condo closing to coincide with the closing of the buyer’s home. The buyer agreed to pay a penalty to the seller and two weeks later everything closed successfully—a close call.