In the last few weeks the Kelowna Real Estate market has seen a dramatic increase in sale activity (see OMREB stats here) and in some sectors of our market (particularly single family homes under 500k) signs of a “Sellers Market” have begun to emerge (see my January post here).
The rather quick shift from a Buyer’s Market earlier in the year to a Seller’s Market has caught some Sellers “off guard” particularly those who did not expect their homes to sell as fast as they did. In the last week I have received a large number of calls (from either the Buyer or Seller) in situations where the Seller wants out of a signed real estate contract.
In most cases, immediately upon signing, a Seller is legally bound to complete the terms of that contract for the Purchase Price (see my post here about what Sellers need to check before closing). The “subject conditions” in the deal are, most often, solely for the benefit of the Buyer and will not allow a Seller to back out once the deal is signed.
If the Seller is unsure about being able to complete the deal as presented they should:
- NOT sign the contract of purchase and sale; or
- ensure that appropriate subject conditions are added to the contract (ie; bank assurance of ability to clear mortgages from title) to the benefit of the Seller.
If a Seller is unsure of their financial payout commitments on closing they should call their mortgage broker PRIOR to listing the property, these financial commitments include: principal, interest, penalties, and other home secured loan products (ie; lines of credit).
Have questions? Selling or Buying a Home? Call Kelowna Real Estate Lawyer Peter Borszcz.