Real estate in Calgary - another bubble?

[bagofpucks]

Yes, it also seems like the home inspection has become another tool for leverage for the buyer as well. “This professional said these things are all wrong with the house, so lower your price by this much…” It was “financing reasons” why our buyer backed out, but the home inspection was pretty hilarious too. It claimed we had no hot water in the house at time of inspection. We were still living there and while the hot water tank was a little bit older, we most certainly had hot water, so no clue what the inspector was doing.

[Sliver]

Deal just closed. Crisis averted. Party at my place.

[Fuzz]

Originally Posted by Sliver

Deal just closed. Crisis averted. Party at my place.

I'll bring the dogs, someone else can bring a bear.

[Cecil Terwilliger]

People should be happy that offers can be conditional. When unconditional offers become common place, it’s bad. The system is already stacked with troublesome practices. Making it worse isn’t going to help anybody.

[tvp2003]

Originally Posted by GGG

Couldn’t you demand more explicit terms?

For the buyer to back out he needs to prove he could not obtain financing at x interest and the seller reserves the right to select a mortgage broker to validate financing could not be obtained.

or on Home inspection give the option of the seller to remediate a defect instead of canceling the deal.

The one and only time we sold our place, I believe our realtor negotiated the home inspection condition so that the buyer could walk away if it exceeded $1,000 to repair (or something like that).

[Winsor_Pilates]

Originally Posted by cKy

We had a conditional sale on our house (in Victoria) 2 weeks ago. They made an offer on Friday afternoon. We countered Friday night and they accepted that Friday night.

We had scheduled open houses on that Saturday and Sunday. People who came into the Saturday showing were told there was an accepted offer. I suspect we lost some walkthroughs based on the offer.

Come Sunday, the offer was pulled by the potential buyer. Basically nothing we could do. We had already cancelled the Sunday OH by that time, so it was a waste of an entire weekend. The fact there is no recourse is garbage. It wasn't a banking issue (as they are obvs closed on weekends) so the reason for pulling out is unknown.

We suspect the buyer put in an offer or 2 on other houses to see which one they can get cheaper, and when the dust settled they took another deal and cancelled ours. Could never prove that though.

I think there should be a deposit included in the offer that the sellers get if the buyer backs out for any reason that isnt getting the finances from the bank.

Incredibly frustrating.

Feel bad for you and hope you find another buyer soon, but you never should have canceled the Sunday open house.

The deal isn't done until it's done, and getting back up interest and even backup offers in place is an important part of the agent's job during the subject period.

[cam_wmh]

Originally Posted by Sliver

Deal just closed. Crisis averted. Party at my place.

I saw the listing buddy, it was priced well. Love it. What's your next plans?

[Locke]

Originally Posted by Sliver

Deal just closed. Crisis averted. Party at my place.

My invitation appears to have been lost in the mail...

[tkflames]

Originally Posted by GGG

Couldn’t you demand more explicit terms?

For the buyer to back out he needs to prove he could not obtain financing at x interest and the seller reserves the right to select a mortgage broker to validate financing could not be obtained.

or on Home inspection give the option of the seller to remediate a defect instead of canceling the deal.

Now whether the buyer accepts the more stringent conditions would be up to them but I don’t see why you couldn’t add more stringent conditions drawn up by a lawyer to limit the ability to back out and stipulate direct penalties for backing out.

Or even add a clause saying there is a $1000 penalty for backing out for any reason.

It’s really a function of whether it’s a buyer or sellers market.

Isn't that basically what the buyer paying for a home inspection does?

[Sliver]

Originally Posted by cam_wmh

I saw the listing buddy, it was priced well. Love it. What's your next plans?

Thanks. Yeah, we went somewhat aggressive on the price because we had already bought a different place that's bigger. Got a smokin deal on that one, so didn't feel a ton of pressure to wring everything we could out of the current one.

New one is two bedroom and has a heated garage I'm turning into a bunkhouse for my kids' friends. Lots of fun times to come!

[comrade]

Originally Posted by tkflames

Isn't that basically what the buyer paying for a home inspection does?

I would never accept any deal with a penalty for backing out regardless of reason. I would assume that it's simply a buyer attempting to screw me out of a grand.

The information asymmetry is heavily tilted in the seller's favour. Does the fact that buyer's can back out of the deal for a longer period than the seller or a home inspection really counter balance that?

[Wormius]

Are you not allowed to have back up offers or is once it’s conditionally sold you’re SOL? It seems like that would solve everyone’s problem, especially if you maybe had some unethical realtor putting in fake offers to steer potential buyers to their own similar properties.

[nik-]

Originally Posted by Wormius

Are you not allowed to have back up offers or is once it’s conditionally sold you’re SOL? It seems like that would solve everyone’s problem, especially if you maybe had some unethical realtor putting in fake offers to steer potential buyers to their own similar properties.

I put in back up offers twice while house shopping. They weren't successful, but they're definitely an option.

[Winsor_Pilates]

Originally Posted by Wormius

Are you not allowed to have back up offers or is once it’s conditionally sold you’re SOL? It seems like that would solve everyone’s problem, especially if you maybe had some unethical realtor putting in fake offers to steer potential buyers to their own similar properties.

You can accept backup offers.
But buyers only make them if they really love the property; otherwise they're better off offering elsewhere on a place that's not conditionally sold and they'll get for sure.

[Lubicon]

Originally Posted by Wormius

Are you not allowed to have back up offers or is once it’s conditionally sold you’re SOL? It seems like that would solve everyone’s problem, especially if you maybe had some unethical realtor putting in fake offers to steer potential buyers to their own similar properties.

When we moved to Calgary in 1997 we put a conditional offer on a house that was accepted IIRC. The sellers then proceeded to accept another (higher) offer and came back to us with a chance to up our offer. We walked.

[you&me]

Originally Posted by Winsor_Pilates

You can accept backup offers.
But buyers only make them if they really love the property; otherwise they're better off offering elsewhere on a place that's not conditionally sold and they'll get for sure.

Originally Posted by Lubicon

When we moved to Calgary in 1997 we put a conditional offer on a house that was accepted IIRC. The sellers then proceeded to accept another (higher) offer and came back to us with a chance to up our offer. We walked.

I was just going to ask... Can a seller walk from a pending conditional offer and accept another offer, either higher or unconditional? Or does a seller need to give the buyer a chance for conditions to be met?

(Thankfully never been in this situation)

[Weitz]

Originally Posted by you&me

I was just going to ask... Can a seller walk from a pending conditional offer and accept another offer, either higher or unconditional? Or does a seller need to give the buyer a chance for conditions to be met?

(Thankfully never been in this situation)

I think the seller would be liable to damages. But it really depends what the conditional accepted offer had written in it.

[Winsor_Pilates]

Originally Posted by you&me

I was just going to ask... Can a seller walk from a pending conditional offer and accept another offer, either higher or unconditional? Or does a seller need to give the buyer a chance for conditions to be met?

(Thankfully never been in this situation)

Conditions are 1 sided so a seller can't walk on a buyers financing, inspection condition etc.
Only the buyer can.

The example above seems strange to me but maybe things were different in the 90s or there was a seller subject condition in the contract.
Those are possible but typically most deals just have buyer conditions.

[you&me]

Originally Posted by Winsor_Pilates

Conditions are 1 sided so a seller can't walk on a buyers financing, inspection condition etc.
Only the buyer can.

The example above seems strange to me but maybe things were different in the 90s or there was a seller subject condition in the contract.
Those are possible but typically most deals just have buyer conditions.

And just to be clear, if the seller accepts a conditional offer, they're tied to that deal until the buyer either a) meets the conditions and closes, or b) buyer can't complete the conditions (financing fails, etc) and can't close?

There is no situation where a buyer negotiates $200k off, and wants 180 days to close and in the meantime the seller receives an offer for $500k over ask with a 10 day closing, where the buyer can say nuts to the first offer and accept the clearly better second offer?

[Winsor_Pilates]

Originally Posted by you&me

And just to be clear, if the seller accepts a conditional offer, they're tied to that deal until the buyer either a) meets the conditions and closes, or b) buyer can't complete the conditions (financing fails, etc) and can't close?

There is no situation where a buyer negotiates $200k off, and wants 180 days to close and in the meantime the seller receives an offer for $500k over ask with a 10 day closing, where the buyer can say nuts to the first offer and accept the clearly better second offer?

Correct, that would be a breach of contract and the buyer would easily sue the seller for that and get their contract enforced.

Additionally, the condition period is only a few days to couple of weeks usually so the actual closing date isn't really necessary information in the example.
Once the buyer removes their conditions, it's a firm deal whether closing is 10 days or 6 months.

The seller doesn't have an out unless they have seller subject conditions to be met in the agreement, but that's rare.
An example would be something like; subject to the seller finding a suitable next property to purchase within 3 weeks.