Why Ask for 2 Deposits on a Home Purchase

Although the headline may indicate the following article would favour sellers, there is also some good information that buyers should be aware of as well. This following article was taken from Mark Weisleder’s column in the Toronto Star dated Friday November 8th 2013:

In general, the courts have indicated that buyers must act honestly, reasonably and in good faith. Unfortunately this will have to be proven in court, which means lawyers, legal fees and the potential for the deposit to be withheld for up to two years.

Sellers are not entitled to a copy of the inspection report unless the parties agreed to it. In my opinion, sellers should always include a contract clause that says if the buyer wants to negotiate a reduction, or cancel the deal because of problems in the inspection report, then the buyer must give the seller a copy of the report. This will give the seller the opportunity to check the problems for themselves and be able to explain it to any future buyer.

If the buyer does not conduct the home inspection at all, or perhaps brings in an unqualified person to conduct the inspection, then I believe that these might be examples of not acting reasonably and in good faith. It would then be difficult for a buyer to try and cancel the agreement and argue that they acted in good faith. That’s why it is so important that buyers always use qualified home inspectors.

In a seller’s market, many buyers decide not to include a home inspection condition so they can provide a “clean offer” to the seller. This usually happens when there is a bidding war.

But there are other ways to protect buyers in these circumstances. For example, you can arrange for a home inspection before you bring your offer. Most sellers will be agreeable to this. You are only asking for trouble if you don’t conduct a home inspection before you decide to buy.

In addition, if a buyer is not in a bidding war, consider two deposits, a small one when the deal is accepted, and a larger once you are satisfied with all of your conditions. That way, if you are not satisfied, there is not much of a deposit that will be worth fighting over.

It is very important for buyers to understand all your legal rights and obligations relating to conditions before you bring any offer to buy a home.

Mark Weisleder is a lawyer, author and speaker to the real estate industry – More real estate stories by Mark Weisleder

The general real estate market is slightly different in Durham Region however with many people from Toronto moving to the  smaller suburban cities such as Ajax, Whitby, Oshawa & Bowmanville, buyers and eventually sellers will be having the same or similar expectations when purchasing a home or listing their homes for sale.

For all of your real estate needs in Durham Region please feel free to contact me directly 

SCOTT ROY 
RE/MAX JAZZ 
21 Drew St. Oshawa, ON 
(905) 728-1600 Office 
(905) 435-7355 direct 
scott@lifeindurham.com 
www.lifeindurham.com 

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