Question:
Seller can’t close because sold price is less than the mortgages on title.
Who is “at fault” here: Listing agent? Seller? Buyer’s agent?
Answer:
An obligation at the outset is that the Listing agent will make sufficient inquiries to determine the correct answers.
Frequently, the Seller actually knows that something is coming very soon, a Trial or Motion on a Court case, but the Writ of Execution is still a few weeks away.
Until the Seller reveals this, no one else would know. But, once we have the Writ of Execution or CRA Lien, it’s too late. The Seller does not have enough equity to sell. The Listing Brokerage is at risk if there is a co-operating Brokerage.
The Buyer’s Brokerage should have had their own client pay them directly. However, if there’s insufficient funds available to pay off all the outstanding liens, then:
- the Buyer can elect to negotiate them, and close, or
- close, and inherit the liens, charges and encumbrances.
Brian Madigan LL.B., Broker