Real estate professionals in London, Ont., say they’re seeing an increasing amount of buyers remorse now that the city’s real estate market has started to cool. Some buyers are considering backing out of deals made months ago when the market peaked.
Slowing sales, fewer bidding wars and more inventory have led an eight per cent price decline in the London region within the last three months after the price of the average home peaked in February at $825,221.
“There is definitely an influx of people who are coming to us looking for some assistance to negotiate their way out of a deal they don’t necessarily want to close on,” said Stephanie Marentette, a lawyer with Cohen Highley LLP in London, who often handles real estate disputes.
Buyer’s remorse
“In some cases it’s buyer’s remorse,” she said. “In other cases, you have people who were coming in with really strong offers that weren’t supported by the value of the property.”
Stephanie Marentette is a commercial lawyer who focuses on real estate and construction law with Cohen Highley LLP in London, Ont. (Cohen Highley LLP)
To understand why all of this is coming home now is because the pandemic had a huge effect on real estate.
At the time, many buyers were looking for a home to solve the problems the pandemic created. More space in the form of a home office or gym and bigger backyards —often with a pool to entertain guests outdoors, which was the only place it felt safe to socialize at the time.
These expectations, combined with pent up demand created a frenzied sellers’ market where buyers who were looking to stand out in a bidding war made snap decisions with huge sums of money that —in some cases, they never actually had.
Backing out can land a buyer in court
“You didn’t have a chance to buy a home if you had a financing condition. I think it became common practice to do that and we forget there’s a massive liability on the end if you can’t fulfil your contract,” said Katherine McIntyre, a mortgage agent with Forest City Funding in London, Ont.
Katherine McIntyre is a mortgage agent at Forest City Funding in London, Ont. (submitted by Katherine McIntyre)
She said she has clients who bought during peak prices in January, February and March who are now running into problems, such as lower than expected appraisal values from the bank, or a lower than expected price for the home they were selling to afford a new one.
McIntyre said much of her job involves finding money and equity to make mortgage approvals happen, but for some of her clients, remorse is a powerful thing.
“It can be very tempting to try to walk away from the deal you agreed to, a lot of people think that initial deposit they put on the line, whether it be $20,000 or $30,000 is worth losing to walk away from a deal where the house value has dropped,” she said.
“That’s not the only cost. Unfortunately, you can face civil litigation.”
If a buyer backs out, forcing the seller to put their home back onto a cooler market, the buyer not only loses their deposit, but is then vulnerable to litigation over the difference when that home finally sells.
At that point, both sides can be drawn into a costly court battle where the legal fees alone can add up to $60,000 to $100,000.
Real estate agent predicts return of sale conditions
While renegotiating or even backing out of a deal can be costly and risky, the current phenomenon is likely only temporary, according to Kim Mullan, a real estate broker with Sutton Group Select Realty in London.
Housing prices in the London region have dropped by about 8 per cent since the market peaked early this year. (Colin Butler/CBC News)
“This is actually a really good time for buyers to be out there,” she said. “There’s a lot more inventory. People are a lot more flexible on conditions, but a lot of buyers have buyer’s fatigue.”
“The time they should be out, especially before the next proposed rate hike, is now.”
Mullan said the market may not be as hot as it once was, but it is still healthy. She predicts the market might see the return of financial conditions and house inspections return to the list of sale conditions — two safeguards that weren’t possible at the market’s height only a few months ago.
“We’re even seeing some deals where the buyer can have a sale of property condition, which we haven’t seen for a long time now.”
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.
Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.
The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.
Wednesday was the last day for advance voting, which started on Oct. 10.
More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.
Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.
An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.
This report by The Canadian Press was first published Oct. 17, 2024.
