The negative impacts of getting out of a Home Buyers contract
There are many reasons why one would want an out of a home buyer’s contract. Financial reasons primarily come to mind, but others including emotional turmoil, a home inspection gone wrong, or as simple as contingencies that are not being met within the contract itself.
But what are the possible consequences of terminating a contract before it happens? Are there any financial implication, or worse legal implications? Well, to answer those questions, there are many negative consequences including financial and possible legal implications if you want out of your home buyer’s contract. Generally speaking one must look at this contract as they would any other contract or purchase. Meaning once you sign the dotted line, there are no returns or refunds – without mega hassles and complications.
If you try to get out of a home buyers contract, be prepared for a long battle. There are no easy ways out, and it does take time and energy and possibly legal action (money) to make it happen. On the more negative side of the coin – the seller may take legal action against you, as they had depended on your purchase. In real estate it is a chain of events that happen once someone lists a home. You sell your home, you buy another home –and on it goes. But when that chain gets broken, someone’s got to take the fall.
In pre-construction condos, there are many contingencies, but generally they do not allow for you to get out of the original contract. There are a few safety nets in place, such as The Tarion and The Condo Act that protect the buyers and the sellers in case something goes wrong or someone wants out. But regardless it is extremely hard to get out of acontract unscathed.
Some developers understand and can be compassionate and allow for some changes, however, most, as in all businesses depend on the sales in order to follow through with the construction. If you change your mind and want out – it could potentially set the schedule back – and that could result in many angry people.
Developers have been known to fight hard to maintain acontract with a buyer. They could sue you, or even charge you for not following through with the contract that you had originally signed.
For these reasons, it is essential to understand what you can or cannot do. What options you have if things go awry, or you simply cannot continue with the commitment. In any case, and any sale, understanding the contract that you sign BEFORE you sign it is important. A professional will ask you questions, and explain what exactly your rights are, and what the consequences could be if you didn’t follow through.
Being aware and informed is something that I believe every buyer whether purchasing pre construction or pre owned, needs to be accomplished before making a decision. Let me help you understand what your rights are, what possibilities you have, and what consequences you could face. Happy house hunting!
The condo market in Toronto is booming, and pre construction condos are always something that is worthy of an investment. Contact me today and let’s chat!
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