This article was written in June 2017. This was the first time in a long time (2008) that the real estate market fell so drastically. Indeed, there were lots of lawsuits arising from the from first six months of 2017.
The issue, of course, is “could this happen again”?
Question:
I am curious to know what grounds Buyers and Sellers have against real estate agents at the present time. I hear that there are plenty of lawsuits.
Answer:
The market rose and fell very quickly. That was a surprise. The shortage in January generated quite a few bidding wars. Prices escalated, and the market has fallen back in late April and early May.
There are a few things here. First, Sellers from January are upset because they still haven’t closed and they sold for too little. They were trading up and now they can’t afford the jump. Most of the time, one could just say “that’s life”. But, in some cases, their agents pushed them into this. Lots of phone calls, meetings, emails etc. all saying “do it in January” etc. What can they buy? Basically, perhaps, the same house they have now down the street for more money! Expected losses on the buy and sell $150,000 plus. So, this could be a problem.
Second, the Buyers from March who won the bidding wars but drastically overpaid and outbid everyone else by a longshot. They might be crazy, their agent might be crazy but the bank isn’t. That means “no financing” available at the time set for closing and they don’t have the money. Their own agent said, of course, you’ll get a mortgage, don’t worry”. Should they be worried? They appear to be in a financial mess. Expected losses on the deal, $150,000 plus. This will take them years to rebuild and get back into the real estate market. So, this could be a problem.
Brian Madigan LL.B.,Broker