Buyers Remorse and Bidding Wars Cost Newmarket Couple $470,000
Blog > must-read
If you are one of the many eager buyers within the Toronto Real Estate Market, you might want to rethink how far you’re willing to go to get your dream home.
During April 2017, while looking for their forever home, David Lea and Xixing Hu submitted an offer of $2.05 million on Douglas and Sheila Gamoff’s home.
The couple listed their Stouffville property March 29th, 2017 for a whopping $2 million during one of the hottest times in Toronto Real Estate history.
After being advised by their realtor that their initial offer was far too low, Newmarket’s Lea and Hu came back with the highest offer in the bidding war of $2.25 million in which the Gamoff’s accepted.
The couple was to provide a total deposit of $120,000 with a first instalment of $30,000 and a second instalment of $90,000 to be paid on April 6th in which Lea and Hu later got extended to April 10th.
Soon after, the couple expeienced second thoughts on the the property as the housing market had taken a dramatic change. As a result of the cooling market, the value of their home had decreased down to a low of $1.8 million leaving the difference up for question.
After learning their (limited) approved mortgage financing and assessed value of their home would prohibit them from securing the necessary financing (to close on the property), the couple was forced to rescind their offer.
The Gamoff’s sued and in return, earlier this month the courts ruled Lea and Hu to pay the difference.
After Lea and Hu’s recision, the Gamoff’s re-listed their home on May 1st, 2017 for $2.25 million. After sitting on the market for quite some time, the Gamoff’s reduced their asking price down to $1.798 million in July 2017 in which they later received an offer of $1.7 million. The deal successfully closed later that fall for $1.77 million.
Though a very expensive lesson learned by Lea and Hu, a very sympathetic Justice Edwards believes this Newmarket couple is not alone in their predicament and warns buyers to not overextend themselves in Toronto’s declining market.