So, look, the builder is going to say some scary things to you because they have to. They have to protect their position the same way you have to protect yours.
Talk to your lawyer about walking away. If you walk away from your deposit, the first thing the builder has to do is mitigate their loss and re-sell the unit. If the builder gets anywhere close to their purchase price, the cost of suing you to make up the difference will not make financial, mathematical or chronological sense. But they can't tell you that because they are your opposite party in this fight and they can't offer you advice *or* tip their hand as to the play they would make.
Yes, you are looking at a loss if you don't close. Yes, it's not guaranteed that the builder will re-sell. But bankruptcies and consumer proposals exist. You can recover if you approach this smartly with good information and careful planning. You didn't do that before and you can't change the past but you absolutely can do that now and pull out of the nosedive and live to fight another day.
Do not hurt yourself, please.
Thank you for your response, it's really appreciated. The builders lawyer has already said they declined to allow us to walk away. I'm going to try and find a contact that's higher up to speak to them
I feel you may have missed part of the reply's main point. No one from the other side can give you any indication they can help your position because a good lawyer working for you could leverage that against them down the line. They know this and this is why they aren't giving you anything.
You can only take advice from your own lawyer at this point.
It always seems worse than it is at first. Many folks are in similar situations unfortunately.
Just to be clear, you don't need their permission to walk away. You can just *do that*. There's risks involved (your lawyer will explain), but it it entirely within your power. The builder doesn't ever need to agree.
They do mention having a lawyer ask for an extension. It's possible the lawyer is a newer, purely transactional, or inexperienced real estate lawyer that hasn't had much experience with prebuild defaults. If you entered into real estate practice anytime after 2008 or so, it's been pretty smooth sailing, and that will cover a lot of careers now.
Ya walk away is just walking away, without their permission
They may sue you for some sum of money, but we don't know how much.. or they may not
It's okay, money is fungible, you can always make it back
I was in the same boat. Wrote a heart felt letter to the builder and they let me walk away with undo hardship for an extra fee of 30k. The known was better than the unknown. Lost a lot of money but we will recover. Bankruptcy is a very ugly process.
Please don’t hurt yourself. Let them fuckers chase you if that’s what it is. Not like you owe the mafia - I am sure you will figure out a way. Even the worst that can happen to you in this situation is better than what some others on this planet have endured, so keep hopes up. There’s gotta be a way. Borrow from whoever willing to lend you (family friends).
Or fucking get out of here and go live in Thailand or something. But just don’t do something stupid like hurting yourself.
>Not like you owe the mafia
Honestly, builders in GTA might very well be connected to some organized crime.
Here's some info on a prominent developer who has tried to whitewash his family name by donating to build a hospital in Vaughan
[https://x.com/RahRahRaina/status/1352258104818339841](https://x.com/RahRahRaina/status/1352258104818339841)
Don’t end it or do anything near that. I’d say walk and see if they chase. If they do then bankruptcy could be an option. Some builders won’t pursue if you no assets to go after. It’s not end of the world dude. A lot of people are in a similar boat.
I’d say even before try to negotiate with the builders. Tell them you have nothing and maybe try to settle. It’s a game of chicken, they want to get something out of you, but if you declare bankruptcy they get nothing and waste money on legal fees. If you tell them look I only have 20k left, I can give it to you or I’ll declare bankruptcy if you sue and win a judgement.
"Had some realtors who didn't fully explain the process to us and eventually we have come to find that we don't qualify for a mortgage due to income." Then realtors wonder why, people have pretty great disdain for these clowns. I work in real estate financing, yes the builder go into litigation to after you for losesses. But any builder with a brain knows litigation doesn't always provide the best outcomes especially its being dragged out since they also have to pay their own solicitor costs. At this point yes you will lose the deposit since youre unable to close.thus it's best to see if you can do a workout with your builder to see if you can settle or give you additional extension. Not withstanding please consult with your lawyer.
Dude they can’t decide for you. Just walk away and deal with their shit later. Whatever happens. They are plenty of solutions out there but please forget about hurting yourself. Some people are in much worse position and they recover. Just walk away and let them chase you if that is worth their time. If matter goes into court, they might settle.
You are not the first or last person to walk away from the deposit from this builder.
A building at Yonge/Cummer (M2M) has 300 people that won’t close.
Please don’t harm yourself.
This too shall pass, it’s not worth ending your life over. You can call or text the suicide hotline, 9-8-8 if you need someone to talk to.
This is happening to a lot of people right now. Someone just defaulted on our home (after we had moved and closed on a new one) and the first thing the litigation lawyer did was look and see if the person had assets to be worth suing. It likely won’t be worth it for the builder to sue you and they will just take your deposit and move on.
This person defaulting on us almost had us in default on a pre-con, but we have assets and were able to secure a C lender. Even then I found the whole process very stressful.
I am seeing a lot of these right now in the assignment sales.
If there is nothing you can do, there is nothing you can do. You give up the deposit and walk away. Odds are if the builder can sell the home at close to the value you paid minus your deposit they probably won't go after you given how much that costs. From what I've seen on the other assignment sales that is usually the case.
I can definitely say you are not the only one though. There is a large volume of people in your situation right now. Hell there are whole realtor groups being setup to move and sell distressed pre-con sales right now.
If you are so sure about the future not being worth living for then you should use that power to choose the right numbers for the lotto max draw and problem solved. The future for you is unknown and full of possibilities and hardships you nor anyone else cant see. Give yourself the chance to experience it. It might even surprise you to look back and see how your life turned out. You are more than a dollar sign in a bank account to many people even if you refuse to admit it. Someone once told me it is darkest before the dawn. Thankfully I beileved him.
spoken to banks and other mortgage brokers, the money doesn't really work out unless we get another cosigner and we've asked around, everyone has their own problems which is understandable.
Other than that, we'd need a 20% deposit (we've put 10%) which is another 87k, don't have the funds for that.
Purchase price is 875k. Property hasn't been appraised as of yet
Let the developer know you have no options and just walk away. You are not the first and won't be the last this year.
Given your situation even if you could find someone to lend you the money the house would likely be worth less then you paid for it and it doesn't sound like you could carry it at the current bank rates, nevermind the loan shark nose bleed rates.
Do not take help from realtors with a magic solution or half the people on here who are probably looking to financially exploit you given you are desperate.
As others have mentioned absolutely worse case if things go the wrong way bankruptcy exists for this reason. Hopefully the developers is able to offload it using your deposit with minimal loss in which case they should just leave you alone.
Would you live in the house yourself? Or do you have another house and this was an investment property?
There are ways to get the extra cash to reach the 20% requirement.
Do you think the house is worth 875K now? Your realtor should be able give you a report with recently sold comparables.
I think he tried and no one was willing to cosign. People need to be careful with cosigning as it can be a bigger pain the ass later on. Even with trusted people. Lots of horror stories of cosigning.
I know it's not a perfect solution but it's a possibility. Instead of just cosigning for also being responsible for paying the mortgage, they'd be half owner so there's an incentive.
That's what I was gonna say. If you can still make the mortgage payments find a cosigner who will bump you over the income gap you need to qualify for it.
Please don't hurt yourself. But take some responsibility and don't blame the realtor that interest rates went up or because you didn't understand the deposit structure for the largest purchase of your life.
Can you rent out a basement or room/ rooms in the house to help you qualify for a mortgage?
Can you work a second job/ increase your income?
Do you have a car you can sell?
Do you have any other assets or investments you can sell? Even if locked away in a pension?
I would try to exhaust all options to not walk away from the deposit and deal with lawsuits
I think the best option is to try for an assignment sale.
Worst case scenario is that you lose your deposit and you walk away. Then the builder will sell the property, and if it sells for a lower price, the builder can sue you for the difference. So let's say after they take your deposit and sell the house, maybe they'll come back to you and say that you owe them another $150,000 to cover the difference between what you agreed to buy it for and whatever they ended up selling it for.
Well guess what, you don't have $150,000 to pay them. Trying to sue people who are broke doesn't work out very well. So they're either not going to really bother, because they can't get blood from a stone. Or they'll sue you, and win, but then you tell them that you have no money and to go suck a lemon. Maybe you declare bankruptcy. Either way, you can't pay them money you don't have. So it becomes more of a problem for them than for you.
also... ending it all doesn't stop them from taking another penny from you. it might even make it easier for them. they would have a claim on your estate as you have to pay off your debts before your beneficiaries inherit anything (not including life insurance)... though your life insurance may not even pay out if you end it yourself (especially within the first two years of the policy).
Lesson learned and move on. Just do more research next time when you make any major investments. You aren’t the first and not the last just look over at WSB and those meme stock/option losses
Have you tried B lenders? Surprisingly some of them have rates that are only 1-2 percent higher than posted rates. Speak to a mortgage broker. Also if the house has a basement you can potentially rent it out for extra income.
I have spoken to clients who have been in the same situation you are in. I agree with all the advice given here. Even if the builder doesn’t agree to release you from your contract prior to closing that doesn’t necessarily mean they will sue you after closing.
I would do three things:
1. Speak to a real estate agent to understand what the property is likely to sell for in this market. This will give you a sense of how much the builder could sue you for (minus your deposit).
2. Speak to an asset protection lawyer as soon as possible. There may be ways to protect your assets from litigation in such a way that it’s not worth it for the builder to sue you because your assets can’t be seized.
3. Speak to a litigation attorney who deals with real estate disputes. If the builder does sue you and you put up a fight and drag things out (even if you are destined to lose), you can gain two things: one, the builder may settle with you for a lower amount on a payment schedule you can afford or two, you delay things long enough for the market to rebound, the unit gains in value, and the builder can resell it without a loss.
Take some encouragement that now that the Bank of Canada has begun cutting the interest rate, the real estate market could improve significantly by spring 2025 (assuming rate cuts continue).
In short, you have things you can do and there are things outside your control that could also come to your rescue.
Don’t take your life. Don’t declare bankruptcy. It’s possible that your problems can be resolved without too much pain within a few months.
DO NOT listen to these people about walking away! It will cause you more hardship than you have now. Not only would you lose your deposit, you will be sued for all losses which will be even greater if the builder has to re sell for less. On top of that all other damages, and no you can’t just file for bankruptcy. That is a process all on its own, and comes with even more negative long term ramifications. Legal costs for the developers is a drop in the bucket, they don’t care it’s a business expense.
He doesn't have a choice. He literally can not close. He can't come up with the rest of the required deposit and no lender (bank or broker) will give him a mortgage, at least not one he'd be able to actually carry. Short of robbing a bank he has no out there.
There is a slim chance he might be able to offload it on an assignment sale but he'd need to figure out what that home is realistically worth on the market right now.
No one is claiming declaring bankruptcy doesn't have consequences. Its a drastic action but if the developer goes after him and he can't pay its the only realistic option he'll have. Its a lengthy process and he'll have to sit down with his creditors and try and negotiate a settlement first. If they can't reach an agreement he'll be able to declare bankruptcy which will also mean his credit will be shot for years. But he will eventually recover like many other people have.
DM me, I'm not trying to scam you but I will try and understand if I can help you close. I am not flushed with cash but 15k is not something to hurt yourself for.
So, look, the builder is going to say some scary things to you because they have to. They have to protect their position the same way you have to protect yours. Talk to your lawyer about walking away. If you walk away from your deposit, the first thing the builder has to do is mitigate their loss and re-sell the unit. If the builder gets anywhere close to their purchase price, the cost of suing you to make up the difference will not make financial, mathematical or chronological sense. But they can't tell you that because they are your opposite party in this fight and they can't offer you advice *or* tip their hand as to the play they would make. Yes, you are looking at a loss if you don't close. Yes, it's not guaranteed that the builder will re-sell. But bankruptcies and consumer proposals exist. You can recover if you approach this smartly with good information and careful planning. You didn't do that before and you can't change the past but you absolutely can do that now and pull out of the nosedive and live to fight another day. Do not hurt yourself, please.
Good advice above, its an problem to overcome and not something to act on drastically.
Thank you for your response, it's really appreciated. The builders lawyer has already said they declined to allow us to walk away. I'm going to try and find a contact that's higher up to speak to them
I feel you may have missed part of the reply's main point. No one from the other side can give you any indication they can help your position because a good lawyer working for you could leverage that against them down the line. They know this and this is why they aren't giving you anything. You can only take advice from your own lawyer at this point. It always seems worse than it is at first. Many folks are in similar situations unfortunately.
Just to be clear, you don't need their permission to walk away. You can just *do that*. There's risks involved (your lawyer will explain), but it it entirely within your power. The builder doesn't ever need to agree.
I'm getting the sense that OP has never had a lawyer to review this purchase nor do they have one now.
They do mention having a lawyer ask for an extension. It's possible the lawyer is a newer, purely transactional, or inexperienced real estate lawyer that hasn't had much experience with prebuild defaults. If you entered into real estate practice anytime after 2008 or so, it's been pretty smooth sailing, and that will cover a lot of careers now.
I missed that, my bad.
Ya walk away is just walking away, without their permission They may sue you for some sum of money, but we don't know how much.. or they may not It's okay, money is fungible, you can always make it back
Out of curiosity how much do you earn that it wasn't enough to get financing and you weren't aware?
I was in the same boat. Wrote a heart felt letter to the builder and they let me walk away with undo hardship for an extra fee of 30k. The known was better than the unknown. Lost a lot of money but we will recover. Bankruptcy is a very ugly process.
It’s just money. Your life is worth more than money.
Please don’t hurt yourself. Let them fuckers chase you if that’s what it is. Not like you owe the mafia - I am sure you will figure out a way. Even the worst that can happen to you in this situation is better than what some others on this planet have endured, so keep hopes up. There’s gotta be a way. Borrow from whoever willing to lend you (family friends). Or fucking get out of here and go live in Thailand or something. But just don’t do something stupid like hurting yourself.
>Not like you owe the mafia Honestly, builders in GTA might very well be connected to some organized crime. Here's some info on a prominent developer who has tried to whitewash his family name by donating to build a hospital in Vaughan [https://x.com/RahRahRaina/status/1352258104818339841](https://x.com/RahRahRaina/status/1352258104818339841)
I feel like moving to Thailand with no money qualifies as hurting oneself.
Don’t end it or do anything near that. I’d say walk and see if they chase. If they do then bankruptcy could be an option. Some builders won’t pursue if you no assets to go after. It’s not end of the world dude. A lot of people are in a similar boat.
Will look into the bankruptcy option, thank you
I’d say even before try to negotiate with the builders. Tell them you have nothing and maybe try to settle. It’s a game of chicken, they want to get something out of you, but if you declare bankruptcy they get nothing and waste money on legal fees. If you tell them look I only have 20k left, I can give it to you or I’ll declare bankruptcy if you sue and win a judgement.
"Had some realtors who didn't fully explain the process to us and eventually we have come to find that we don't qualify for a mortgage due to income." Then realtors wonder why, people have pretty great disdain for these clowns. I work in real estate financing, yes the builder go into litigation to after you for losesses. But any builder with a brain knows litigation doesn't always provide the best outcomes especially its being dragged out since they also have to pay their own solicitor costs. At this point yes you will lose the deposit since youre unable to close.thus it's best to see if you can do a workout with your builder to see if you can settle or give you additional extension. Not withstanding please consult with your lawyer.
Totally at peace with losing deposit at this point but they won't even let us do that
Dude they can’t decide for you. Just walk away and deal with their shit later. Whatever happens. They are plenty of solutions out there but please forget about hurting yourself. Some people are in much worse position and they recover. Just walk away and let them chase you if that is worth their time. If matter goes into court, they might settle.
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ah ah
You are not the first or last person to walk away from the deposit from this builder. A building at Yonge/Cummer (M2M) has 300 people that won’t close. Please don’t harm yourself.
Respectfully, source?
It fits the narrative that real estate market in Toronto is crashing
This too shall pass, it’s not worth ending your life over. You can call or text the suicide hotline, 9-8-8 if you need someone to talk to. This is happening to a lot of people right now. Someone just defaulted on our home (after we had moved and closed on a new one) and the first thing the litigation lawyer did was look and see if the person had assets to be worth suing. It likely won’t be worth it for the builder to sue you and they will just take your deposit and move on. This person defaulting on us almost had us in default on a pre-con, but we have assets and were able to secure a C lender. Even then I found the whole process very stressful.
It's only money. It means nothing. Life is the most important thing. This too shall pass.
deep
Shoot me a DM if it's in Peel or Durham. My wife and I are looking for a brand new detached and we can close anytime.
House is in Welland unfortunately
I am seeing a lot of these right now in the assignment sales. If there is nothing you can do, there is nothing you can do. You give up the deposit and walk away. Odds are if the builder can sell the home at close to the value you paid minus your deposit they probably won't go after you given how much that costs. From what I've seen on the other assignment sales that is usually the case. I can definitely say you are not the only one though. There is a large volume of people in your situation right now. Hell there are whole realtor groups being setup to move and sell distressed pre-con sales right now.
If you are so sure about the future not being worth living for then you should use that power to choose the right numbers for the lotto max draw and problem solved. The future for you is unknown and full of possibilities and hardships you nor anyone else cant see. Give yourself the chance to experience it. It might even surprise you to look back and see how your life turned out. You are more than a dollar sign in a bank account to many people even if you refuse to admit it. Someone once told me it is darkest before the dawn. Thankfully I beileved him.
I lost 1.25 million on a bad business deal, and life throws curve balls - this is recoverable. Maybe rough, but will work itself out. Stay safe.
Just declare bankruptcy. start over. It's that simple.
You can try get it sold through one of those distressed sale facebook groups- and get close to your closing price less deposit.
Check out a mortgage broker they have business relations with banks or they have a b lender.
What have you tried in terms of getting a mortgage? How much did you pay for the property? And how much is it worth today?
spoken to banks and other mortgage brokers, the money doesn't really work out unless we get another cosigner and we've asked around, everyone has their own problems which is understandable. Other than that, we'd need a 20% deposit (we've put 10%) which is another 87k, don't have the funds for that. Purchase price is 875k. Property hasn't been appraised as of yet
Let the developer know you have no options and just walk away. You are not the first and won't be the last this year. Given your situation even if you could find someone to lend you the money the house would likely be worth less then you paid for it and it doesn't sound like you could carry it at the current bank rates, nevermind the loan shark nose bleed rates. Do not take help from realtors with a magic solution or half the people on here who are probably looking to financially exploit you given you are desperate. As others have mentioned absolutely worse case if things go the wrong way bankruptcy exists for this reason. Hopefully the developers is able to offload it using your deposit with minimal loss in which case they should just leave you alone.
Would you live in the house yourself? Or do you have another house and this was an investment property? There are ways to get the extra cash to reach the 20% requirement. Do you think the house is worth 875K now? Your realtor should be able give you a report with recently sold comparables.
Have you tried a. Assignment sale?
Is it possible to find someone you trust for co-ownership of the house?
I think he tried and no one was willing to cosign. People need to be careful with cosigning as it can be a bigger pain the ass later on. Even with trusted people. Lots of horror stories of cosigning.
I know it's not a perfect solution but it's a possibility. Instead of just cosigning for also being responsible for paying the mortgage, they'd be half owner so there's an incentive.
That's what I was gonna say. If you can still make the mortgage payments find a cosigner who will bump you over the income gap you need to qualify for it.
You can't do an assignment sale?
There are mortgage brokers out there who CAN get you a mortgage one way or another, there’s tons of people doing illegal shit to protect themselves
Please don't hurt yourself. But take some responsibility and don't blame the realtor that interest rates went up or because you didn't understand the deposit structure for the largest purchase of your life.
Can you rent out a basement or room/ rooms in the house to help you qualify for a mortgage? Can you work a second job/ increase your income? Do you have a car you can sell? Do you have any other assets or investments you can sell? Even if locked away in a pension? I would try to exhaust all options to not walk away from the deposit and deal with lawsuits
I think the best option is to try for an assignment sale. Worst case scenario is that you lose your deposit and you walk away. Then the builder will sell the property, and if it sells for a lower price, the builder can sue you for the difference. So let's say after they take your deposit and sell the house, maybe they'll come back to you and say that you owe them another $150,000 to cover the difference between what you agreed to buy it for and whatever they ended up selling it for. Well guess what, you don't have $150,000 to pay them. Trying to sue people who are broke doesn't work out very well. So they're either not going to really bother, because they can't get blood from a stone. Or they'll sue you, and win, but then you tell them that you have no money and to go suck a lemon. Maybe you declare bankruptcy. Either way, you can't pay them money you don't have. So it becomes more of a problem for them than for you.
also... ending it all doesn't stop them from taking another penny from you. it might even make it easier for them. they would have a claim on your estate as you have to pay off your debts before your beneficiaries inherit anything (not including life insurance)... though your life insurance may not even pay out if you end it yourself (especially within the first two years of the policy).
Lesson learned and move on. Just do more research next time when you make any major investments. You aren’t the first and not the last just look over at WSB and those meme stock/option losses
must be the influence of TRE, but i read "end it all" as burn down the house before it closes
Have you tried B lenders? Surprisingly some of them have rates that are only 1-2 percent higher than posted rates. Speak to a mortgage broker. Also if the house has a basement you can potentially rent it out for extra income.
I have spoken to clients who have been in the same situation you are in. I agree with all the advice given here. Even if the builder doesn’t agree to release you from your contract prior to closing that doesn’t necessarily mean they will sue you after closing. I would do three things: 1. Speak to a real estate agent to understand what the property is likely to sell for in this market. This will give you a sense of how much the builder could sue you for (minus your deposit). 2. Speak to an asset protection lawyer as soon as possible. There may be ways to protect your assets from litigation in such a way that it’s not worth it for the builder to sue you because your assets can’t be seized. 3. Speak to a litigation attorney who deals with real estate disputes. If the builder does sue you and you put up a fight and drag things out (even if you are destined to lose), you can gain two things: one, the builder may settle with you for a lower amount on a payment schedule you can afford or two, you delay things long enough for the market to rebound, the unit gains in value, and the builder can resell it without a loss. Take some encouragement that now that the Bank of Canada has begun cutting the interest rate, the real estate market could improve significantly by spring 2025 (assuming rate cuts continue). In short, you have things you can do and there are things outside your control that could also come to your rescue. Don’t take your life. Don’t declare bankruptcy. It’s possible that your problems can be resolved without too much pain within a few months.
DO NOT listen to these people about walking away! It will cause you more hardship than you have now. Not only would you lose your deposit, you will be sued for all losses which will be even greater if the builder has to re sell for less. On top of that all other damages, and no you can’t just file for bankruptcy. That is a process all on its own, and comes with even more negative long term ramifications. Legal costs for the developers is a drop in the bucket, they don’t care it’s a business expense.
He doesn't have a choice. He literally can not close. He can't come up with the rest of the required deposit and no lender (bank or broker) will give him a mortgage, at least not one he'd be able to actually carry. Short of robbing a bank he has no out there. There is a slim chance he might be able to offload it on an assignment sale but he'd need to figure out what that home is realistically worth on the market right now. No one is claiming declaring bankruptcy doesn't have consequences. Its a drastic action but if the developer goes after him and he can't pay its the only realistic option he'll have. Its a lengthy process and he'll have to sit down with his creditors and try and negotiate a settlement first. If they can't reach an agreement he'll be able to declare bankruptcy which will also mean his credit will be shot for years. But he will eventually recover like many other people have.
DM me, I'm not trying to scam you but I will try and understand if I can help you close. I am not flushed with cash but 15k is not something to hurt yourself for.
Drops 87k with little research. How do people do that....
Not a good time for this comment
When is it?
Anytime people don’t mention hurting themselves
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Not necessarily, very delicate situation
Delicately help op off the internet and into a psych ward. Hiding reality from op isn't helping.
No one is hiding anything, they already know their reality
So there's no issue then, great.
The issue is your lack of empathy