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So my wife and I are looking for our first home - we have the cash saved up and ready to roll - approved by the bank, etc.

Seen a house last Thurs eve - it needed a bit of work but we are willing to get something that needs work since we have family that does trades anyway.
But anyways, the owner was so desperate to sell he took the first offer presented to him (ours was going to be the 2nd later in the day) and refused all others - I guess he REALLY need the dough!

My ques is this - the offer that was accepted was based on financing - how often does something like that fall through, where the buyers cannot get financing?

I would like to know if there is still a shot that the buyers will fall short and we pick it up.
 

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You definitely have a shot but I wouldn't hold your breath.

For one thing the deal might not fall through for a while - they have until closing to come up with the money after all. I don't know the stats but I suspect the majority of accepted offers end up completing the deal.

As for the "desperate" owner. He probably took the first offer because it was a good one. I can't say if he was desperate or not but it's not like he gets the money the same day.

I would have scheduled both offers at the same time.
 

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I think this partially depends on what province you are in. I am in Ontario (ironically, we got our house when the first offer fell through due to financing).

If you are in Ontario, the house is conditionally sold. This means that the vendors can still entertain other offers (unless it is specified in the Agreement of Purchase and Sale that they cannot) and the house can remain listed on MLS.

Typically, a financing condition is a week or less, so if the deal doesn't fall through in that time frame it has firmed up and the sale is firm. The exception would be if the deal is conditional on the purchaser selling their home - then the condition can be a lot longer.

If your agent 'registers interest' in the property with the listing agent's firm that firm will inform your agent if the deal falls through.

Quite often a financing condition is used as an 'out clause' for the purchaser so they have an excuse to get out of the deal if they change their mind and is really just a formality. If the purchaser's agent is good at their job, they've already ensured that their client is qualified before investing this much time and effort.

I'm sure there are some real estate agents in this forum who can entlighten us further...
 

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For one thing the deal might not fall through for a while - they have until closing to come up with the money after all.
Once the condition is waived and the sale is firm, you cannot back out in Ontario. If you do, the vendor will likely sue you for breach of contract - and there is a possibility that they won't be able to close on a property that they have purchased because their sale to you fell through so they in turn will be sued, and so on, and so on.
 

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Once the condition is waived and the sale is firm, you cannot back out in Ontario. If you do, the vendor will likely sue you for breach of contract - and there is a possibility that they won't be able to close on a property that they have purchased because their sale to you fell through so they in turn will be sued, and so on, and so on.
You can back out if you don't have the money to complete the deal. :)

I think the main penalty in that case will be the lost downpayment which should go to the vendor. I can't see too many vendors suing unless maybe it's a high value house?

True story - when we sold my wife's house a few years ago there wasn't exactly a lot of demand for it. We did get a reasonable offer within a couple of weeks so she accepted. The house value was around $200k and the buyer put down $5k. Small downpayment but he was the only offer.

Fast forward 8 weeks to the close - our lawyer started calling us a couple of days before close saying that he hasn't received anything from the other side. This isn't overly unusual but it stretched right up to the close. Closing day comes and nothing is heard from the other lawyer or agent.

The next day the buy agent calls and says the buyer hasn't got the financing but will have it tomorrow. This conversation is replayed about 8 times over the next 2 weeks. Finally we decided that we would just pull the deal, keep the $5k and put it back on the market. Ironically we got the call that day that the financing was in place and we could go ahead with the deal.

The deal then got done but of course we were up at my parents cottage so we had to drive into the nearest little town (20 minutes) several times to receive and send documents. Oh and the buying agent had the nerve to deliver a baby in the middle of all this (without a back-up) which also delayed the sale by a couple of days.

We weren't really affected by the delay other than some very temporary cash flow issues (long story) since we already in our new house.
 
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