Market Defaults and Remedies
The current Toronto real estate market has been interesting and somewhat volatile. The actual reasons don’t matter that much. It accelerated rapidly and then it declined abruptly. This caught both Buyers and Sellers off guard.
Some people don’t want to close on their deals:
1) Sellers from January believe they sold for too little,
2) Buyers from March and April believe they paid too much.
As for the January Sellers, there are two groups: the downsizing group and the trading up group. For the downsizing group, if they were simply liquidating, then they should have waited. If they were buying something else, and they waited until March-April, then it may not have been worthwhile to trade down at all. If they were attempting to trade up, then we have basically the same problem here. The jump was just too large and may not have been worthwhile.
Looking at the January Sellers, their reluctance to close on their sales may be partly driven by the purchases if indeed they bought at the height of the market.
When it comes to Buyers, it’s much the same thing. Often, they are Sellers too. They are very happy if they bought in January and sold in March-April.
The best market to have is one which gradually increases slowly and steadily, year after year.
VOLATILITY is not good. It’s unpredictable and causes casulaties.
If we have a defaulted transaction, we know that:
1) At a minimum, the Seller gets to keep the deposit, and
2) If there are other losses, the Seller can sue for them too (having given credit for the deposit).
Costs and Expenses of Litigation
This is going to cost “real money”. Litigation is not cheap! It could cost thousands of dollars to recover a rather modest sum. It could also take years, and occupy a good deal of your time.
Very few litigants know how to manage a litigation file well. This area of expertise is often restricted to the Claims Supervisor at an Insurance company and the General Counsel at major corporations. The file and the expenses need to be well monitored and supervised or the file will get “out of control” and you will be facing an enormous, unexpected, and sizeable bill from the lawyer.
So, you are looking for $50,000; it could easily cost you $30,000 to get it. Basically, that means that you netted $20,000!
This is the preferred solution. Anything from $21,000 and up would have been better on a net basis.
Brian Madigan LL.B., Broker