We're in the middle of a period where real estate supply is greatly increasing due to pre-construction sales of years past. 

Couple that with the uncertainty of many things, like job security, and you've got a recipe for falling prices.  This is simple supply and demand. 

This supply increase is expected to fall sharply in 2028, which could lead to another boom in the housing market.  Until then, those who have purchased pre-construction properties (primarily condominium apartments) may feel a bit of struggle off-loading their investments. This is because current resale prices have fallen below their pre-construction purchase prices. 

Let's take a step back to what this article is about- financing.  What happens if you have yet to close on your pre-construction property? How will you qualify for a mortgage if prices have dropped?  

This will be especially difficult if the mortgage amount needed on the property is now the value of the property. 

Currently, RBC is an institution offering blanket appraisals on pre-construction units.  It's a rather unusual offering to win business, and I'm not sure how it is done to be honest, but many builders have directed buyers to RBC for this solution.   Essentially, they will appraise your property at your purchase price, so that you are not on the hook for any differential. 

I believe as the competition increases for mortgages, you will see more institutions jumping in because this pool of mortgages is very large.  I've also seen BMO ads here and there, so perhaps it's already begun.

Without these solutions, a buyer likely would be forced to provide more Cash as a down payment, which in tough conditions may also come from other debt like a 2nd mortgage or credit. 

I don't want to end this blog post with doom and gloom because the market is relatively good, in my opinion, especially when it comes to freehold sales.  The main thing I wanted to note was that there are solutions if you speak with the right people.  Reach out anytime. Stay social!

Providing the deposit in an agreement of purchase and sale is NOT a condition of the agreement.

You see it often in real estate.  A buyer decides to put an offer in on a property.  Once the offer is accepted, the buyer changes their mind and decides not to provide the deposit cheque.  

In 2012, when I first experienced this, it was common advice to just move on. Sign a mutual release, as a seller, and continue to sell the property.

In 2025, after the boom in sales within the Greater Toronto Area, call it of the last 8 years or so, lawyers have done their part in educating the public, and realtors alike.  Now it is commonly NOT ADVISED to sign a mutual release, because that releases both parties from possible litigation.

So, what happens when a deal is made, even if it is conditional on a few items, if the deposit is not provided within the timeframe mentioned in the contract?

1) The Buyer is in breach of contract!
2) The seller can exercise litigation, usually first in the form of a demand letter from a lawyer, expressing the severity of the situation
3) The buyer will likely want to revive the contract- Good luck. The seller to counter will likely have some stipulations in the revived contract, to prohibit the buyer from "backing out" due to conditions.
4) This opens the door for litigation, for the entire amount of the deposit, and possibly the difference in selling price, if the seller re-lists the property and isn't able to obtain a similar selling price.

Of course, you'd want to obtain legal advice from an appropriate lawyer, but this is what happens if things are done properly, from my experience. 

Message me anytime to discuss!

This was one of the most interesting cases of 2023 and 2024.  

In truth, this case is a bit too exciting for Canadian real estate, as it offers Celebrity Status, with one of the best basketball players in the world, combined with Cryptocurrency, Fraud, Mob Violence... and lake front housing!?  Ultimately, it lead to a very interesting decision by the courts, one that may not be repeated under normal circumstances.

The case:

A landlord, who is actually a very famous builder/developer in the greater Toronto area, leased a property to a Mr. Pleterski in 2021 via a rent-to-own agreement.  If you recall, 2021 was a time of exponential growth in many markets, including crypto currency.  

Come the year 2022, as markets turned, it was found that Mr. Pleterski ("The Crypto King") had defrauded many people, to the tune of $25 million.  Furthermore, some were after him.

Supposedly the leasing agent feared for Pleterski's life at one point, and it was also known that in December of 2022, Pleterski was kidnapped by those he had defrauded. 

In 2023, the property was then sold to Shai Gilgeous Alexander (SGA), NBA Player.   Unbeknownst to him and his parter, they took possession, only to constantly have people knocking on the door looking for Pleterski.  These were not normal passer-bys, obviously.  The constant approaches to the house were threatening.

By late 2023, a hearing took place for a case putting SGA against the landlord, claiming that there was a defect known by the seller that rendered the property uninhabitable.  Interestingly, SGA won the case the court ordered a reversal of the sale and damages.

Typically, a latent defect refers to a physical property that makes a place uninhabitable, so it was very interesting to see judgement in this fashion.  This of course is an uncommon occurrence.

Who says Canadian Real Estate is boring?

Source: https://www.canlii.org/en/on/onsc/doc/2023/2023onsc6688/2023onsc6688.html

In this interesting case, a buyer entered into an agreement with a builder to purchase a property, pre-construction, but due to a 9 minute delay in providing funds ended up spending an additional $113,000 for closing.

This particular case is for a claim of the money back by the buyer, bringing into light the concept of "Closing Under Protest".  Their claim was denied

Details:

-Buyer purchased a property from Valstar Homes (Oakville Sixth Line) Inc. set to close no later than 5:00pm on Jan 27, 2021

-Agreement stated time is of the essence (as most agreements) for this contract and any acceleration or extension thereof

-In December 2021, Builder extended to April 20, 2021

-The buyer foresaw a delay on April 20, 2021 and asked for a 1 day extension, through counsel

-Builder denied the extension, as time was of the essence

-Buyer found private funding before the day's end and wired the money to Valstar’s solicitor at 4:52 p.m. but the funds did not arrive until 5:09 p.m. 

-The next day, April 21, 2021, Valstar took the position that the buyers breached the contract, as time was of the essence.  Valstar's counsel said they would wire back the funds.

-Later that day, Valstar offered to "revive" the Agremeent if the purchasers added $100,000 + $13,000 HST.  The price was justified based on the claim that price of the property had increased approximately $600,000 since time of purchase. 

-The Buyer agreed

-The Buyer claim to have closed under protest, and want their money back

-This was denied by the court as the letter from their counsel accepting Valstar's offer made no reference to a protest.