How it ends

It was the best of times. It was the worst of times. Cheap funds flowed. FOMO raged. Peak house was with us. Derek looked upon this, and it was good. ‘Let’s do it,’ he said to her. And, lo, they listed.

The quirky McMansion on the northern border of the GTA was typical for the hood. Big lot, big garage and now, big price. It was the spring of 2017, early April, and house prices were running 30% hot year/year. ‘We’re gonna go for the limit,’ the blog dog told me as the big day came. So the ask was $2 million, more than double what they had paid, but not too much for the market to bear.

About the time the sign went into the lawn, the Toronto Real Estate Board published this:

“It has been encouraging to see that policymakers have not implemented any knee-jerk policies regarding the GTA housing market. Different levels of government are holding consultations with market stakeholders and TREB has participated and will continue to participate in these discussions. Policy makers must remember that it is the interplay between the demand for and supply of listings that influences price growth,” said Mr. Cerqua (the board president).

Strong competition between buyers continued to cause high levels of price growth in all major market segments. The MLS® Home Price Index (HPI) Composite Benchmark Price was up by 28.6 % year-over-year. For the TREB market area as a whole, the average selling price was up by 33%.”

There were 18 showings in the space of a few days followed by three competing offers. The highest came from a mortgage broker and her husband who jacked up their bid by $200,000 to come out on top.

“Sold it tonight for 2.25 !!,” Derek wrote me, elated – but also a bit confused. “Hope we did the right thing.” After all, the market was smoking hot. Every listing lured multiple bids. No conditional offers. Each week the value of properties shot higher in what was clearly a classic, emotional, unsustainable bubble. But for every buyer stressed about missing out came a seller stressed they were selling too cheap. As was written here, over and over, this will not end well.

And it didn’t.

Two days after making the offer, and not long before the Ontario government unveiled a market-killing package of reforms, the buyers showed up and begged Derek to get out of their firm deal. He refused. Wisely, he called a lawyer. Within a few days the buyer’s counselor had sent a formal note saying his clients would be aborting the deal.

Then commenced one full year of misery, expenses, stress and experience. The house was listed again, this time at $2.25 million. Crickets. The price was dropped to less than two mill, then down again. Nothing. Lawyers’ letters flew. The buyers stopped communicating, adopting a strategy of obfuscation, delay, dodging and silence. Finally an offer emerged, and Derek grabbed it. The house eventually sold in late summer for $1.7 million, and closed in October.

Thus, the extent of Derek’s damages was finally known – the difference between the original peak house sale price and the post-boom value, or $480,000. And meanwhile the stressed-out seller had forked over almost $100,000 in legal fees. Being a matter of contract law, there was not much the derelict buyers could argue in their defence as the matter moved closer to trial. They alleged Derek had not been quick enough in re-listing the house after they broke the deal – a position the judge would later dismiss.

Finally, the defendants’ delays were defeated. The case ended up before a pre-trial judge, with Derek asking for a summary judgment. He got it last week.

Said his honour:

“The Plaintiffs are entitled to damages based on the difference between the contracted-for sale price between the parties and the ultimate sale price of $1,780,000. The Plaintiffs are also entitled to the special damages claimed.

“The impact of this court’s decision will undoubtedly have a dramatic effect on the Defendants. I have every sympathy for the Defendants. With the changes in the real estate marketplace in the Greater Toronto Area, I have every expectation that there may be more cases where purchasers find they have overextended themselves in a declining market. Purchasers would be well advised to consider making their offers to purchase contingent on financing, and for the sale of their existing home if they have one.”

Well, now Derek has to collect, and is heartened to know the defeated sellers have listed their house. He will be made whole, he believes. The others will be gutted.

On Sunday I asked Derek for this thoughts on the process:

Garth: As you are aware this has been hell for us. We sure have learned a lot about real estate law! It put our lives on complete hold for over a year. It was a very difficult decision for us to even sell our house let alone go through what we did. We had no intention of ever moving from that house, loved it there and put our heart and soul in that place for 20 years. But as it is with most things, everything is for sale at a price.

We were not greedy but opportunistic and saw a chance to have a comfortable retirement. We did not institute a bidding war by pricing low – that happened on its own. We accepted the first offer from the buyers and expected them to honour it as we did.”

In the last few days local media’s been filled with coverage of a group of new-home buyers in Oakville who paid too much for their unbuilt houses in the bubble last spring. The value of those properties has dropped, as have their existing homes. Many claim they now cannot raise the funds to close the deals on places worth less than they paid, and find it unfair. They asked for government support. The politicians, of course, said no. So as his honour stated, there’s more to come.

Much more.

194 comments ↓

#1 Cheese on 04.08.18 at 2:48 pm

Most unfortunate for both parties, nobody wins when FOMO happens.

#2 Technical analysis? on 04.08.18 at 2:48 pm

and now he has to collect. good luck

#3 Stan Brooks on 04.08.18 at 2:56 pm

High end mental institutions are expensive.

But 2.25 mil for McMacsion in a GTA outskirt is outrageous.

450 k sounds about right.

#4 a dee on 04.08.18 at 3:04 pm

hard to have any compassion for derek.

he will get $500k more than his house was ever really worth for his inconvenience, which is the cost he pays. he could have let them walk and stayed in his house. you have to pay to play derek …

#5 BurlingtonShyster on 04.08.18 at 3:06 pm

Much more to come? Last week you said it makes sense to buy in 15% down markets….Oakville is one of those markets

https://docs.google.com/spreadsheets/d/1HZc4PUMTkiQQQ2y6XZjpkPpzpO5KDbXLNU-NJlxgQjU/edit?ts=5a7cde9c#gid=2137854922

Oakville is going to be decimated over the next 2 years

I said in -30% markets. – Garth

#6 not so liquid in calgary on 04.08.18 at 3:10 pm

@ Technical analysis? on 04.08.18 at 2:48 pm
and now he has to collect. good luck

————————————————————————

couldn’t Derek, the seller, put a lien on the first prospective buyers’ home to collect his judgement?

#7 palebird on 04.08.18 at 3:14 pm

Any city in India or China with a million people or more is already incredibly crowded and polluted. Suffocating noisy endless traffic jams from 0500 to 2100 with maybe a break one day of the week. Sure people may be able to buy cars and motorcycles but then what? It is the same in Indonesian, African and South American cities too. It is all a bad joke. We are a priviledged society (western) and we live in a bubble. An awful lot of these people want to live like us(or think they do) but if they ever achieve it they will only find emptiness. Nothing there. No rainbow.Try going to the third world for three or six months living among the people and see what a shock it is to come back to this “reality”. Crazy stuff. Hard to say where it all goes. But it will have to change. We can’t keep living ths fairy tale because we have pushed it to the limit, not much farther we can go. And you have people like Derek. Poor him.

#8 Technical Analysis? on 04.08.18 at 3:21 pm

#6 not so liquid in calgary on 04.08.18 at 3:10 pm

couldn’t Derek, the seller, put a lien on the first prospective buyers’ home to collect his judgement?
————————————————————————

…. if the buyers had a home in the first place… if they’re smart, they’ve hidden all their assets, quit their jobs, or even left the country.

who knows. $480K + $100K in expenses goes a long way in a third world country. where you can live like a king for the rest of your life.

#9 For those about to flop... on 04.08.18 at 3:24 pm

O.k,boys and girls.

As we turn our heads and look at the replay on the Jumbotron,here’s what I need.

Someone to verify what these recent flips in Vancouver went for…

M43BC

1285 Sherman Street, Coquitlam paid 1.08 May 2017 ass 1.12 asking 998

2891 Pandora Street, Vancouver paid 1.39 asking 1.39

6008 6th st ,Burnaby.Paid 2.42 Feb 2017 asking 2.58 now 2.38

2831 Venables st. Vancouver paid 2.41 November 2015 asking 2.39

#10 Fish on 04.08.18 at 3:24 pm

It’s spring, lots of cardboard boxes around, no hurry

#11 Millennial investor on 04.08.18 at 3:26 pm

The part that I find shocking is that most buyers of multimillion dollar homes have so little ready cash. Those Oakville buyers were almost entirely dependant on the whims of an overheated housing market or TNLB to be able to close. I imagine is same is true with Derek’s original buyer. I guess you can bid any ridiculous sum for a nondescript McMansion since you’re not really the one paying for it.

#12 domain on 04.08.18 at 3:32 pm

That was the correct judgement to be made. A deal is a deal, and in this case is was written in a contract.

The derelict buyers would have done the exact same thing had the tables been turned, and they know the rules and the laws being a mortgage broker.

Poor judgement cost them $480k plus whatever loss they take by selling their own house now 1 year later to cover the damages.

They would be a couple of hundred thousand less far behind, and had a roof over their head had they just done the right thing and honored the contract.

Anyone who thinks Derek was in the wrong or that he is mean or greedy, isn’t thinking logically. People have to take responsibility for their actions.

#13 X on 04.08.18 at 3:34 pm

Even raising the required downpayment back to 10% cannot fully prevent these instances from occurring…but it may help protect people from their own undoing.

#14 Old Stock Canadian on 04.08.18 at 3:36 pm

Toronto is a growing city. Every workday afternoon at Steele Avenue West to as far as Steeles Ave East and Staines Avenue in Markham, very long traffic jams that mirror traffic jams in Beijing and Lagos clogs up the movement of the city.
It’s even worse at Finch Ave from Highway 27 to Morningside and Finch all the way in Scarborough. Traffic jams that only get worse with each and every passing year.
Soon all of us will have to pay over $1,500 a month to rent a closet and pay another $1,000 to rent a shared bathroom and kitchen. We will be living worse than the working class in overcrowded cities like Hong Kong or Shanghai.
My estimate is that the population of Toronto will increase from our current 3,000,000 to 8,000,000 by 2028. Prepare for smog, pollution, traffic and terrible social life in Toronto.

#15 mathman on 04.08.18 at 3:36 pm

Congrats Derek – despite what I’m sure was not fun you prevailed. The buyers should held accountable to the full extent of the law, as without legal recourse and trust the contracts would not be worth the paper they are printed on.

This mortgage broker should have her name made public and loose her license – which would be the case in many professions. Of anyone that should know better should be her and although I wouldn’t consider it a profession she should be banned from the industry for a period or permanently.

On another topic, I encourage my fellow dogs to speak up and not let these wankers in Oakville tie up your elected officials time with their drivel. This story is beyond anything i would have imagined, buying 7 figure homes pre-constrcution and complaining to all levels of Gov’t that they cannot close. the mayor of Oakville actually took the time to write a letter to Mattamy and no doubt their local MPP and MP is being dragged into this BS.

These stories are the not even the Canary’s yet.

Stay liquid and live within your means – works every time, all the time.

Math

#16 Johnny on 04.08.18 at 3:38 pm

I work at a company in Oakville that provides title insurance. They started letting go the contractors that work there, just because the housing market is down and less money are made on that… I wonder if people started losing their jobs because of that bubble.

#17 Dog in The Fight on 04.08.18 at 3:39 pm

The party goes on in YCR, jam packed open houses. Clean air, clean water, safe streets and ethical government. For many people in the world this is the promise land!

#18 A J on 04.08.18 at 3:55 pm

Greed.

#19 Fake News Again on 04.08.18 at 4:01 pm

Dr. Talc on 04.07.18 at 8:17 pm
3 Fake News Again on 04.07.18 at 3:06 pm
AGuyInVancouver on 04.07.18 at 1:19 pm
#133 Mattl on 04.07.18 at 12:03 pm

…We complain that the average Canadian can’t afford to buy in Van, well the average Spainard can’t afford Madrid and the average Italian can’t afford Rome. Unaffordability for the middle class is not a uniquely anadian problem. The fact that an educated Canadian can find a good job and cheapish housing in other countrys doesn’t tell much of a story.
_ _ _
Both Madrid and Rome are the “first cities” and capitals of their countries. Vancouver is neither, so it is your analogy that is flawed.
______

Not to mention that unlike Vancouver, Madrid and Rome did not have its population’s prospects of home ownership destroyed by foreigners laundering their money which the Govt has done nothing about for 25 years.

They created FINTRAC

______

I rest my case. FINTRAC is completely useless. They never arrest or seize property anywhere. If FINTRAC actually worked there would have been thousands of arrests and/or property seized in Greater Vancouver for money laundering. And their has not been or it would make the news…..

#20 Danny on 04.08.18 at 4:15 pm

I personally took Bondeco Rust Proofing to court for serious rusting of car.
They would cover the repairs only if I used their own body shop at inflated cost.
I won case in court……never collected a penny.

Good luck in collecting. This is why lawyers get their payment first.

Please let us know if you collect……you owe us that.

#21 young & foolish on 04.08.18 at 4:16 pm

Notes from Sbux:

People love houses …. of course they would, since they live in them … so, when the dust settles and prices more or less stabilize, people will come back to the market.

#22 FOUR FINGERS WATSON on 04.08.18 at 4:18 pm

#7 palebird
Try going to the third world for three or six months living among the people and see what a shock it is to come back to this “reality”. Crazy stuff. Hard to say where it all goes.
……………………………

I do that every year for a few months. Here is where I think it all goes….our middle class and standard of living is eroding. Third world middle class and standard of living is rising. Thanks to globalization an equilibrium will be found. Our standards of living will be much the same in a few decades or generations. I think that the party is over for us.

#23 Andrew Woburn on 04.08.18 at 4:21 pm

“Twenty years after the Barrett Commission, former leaky condo owner Balderson still gets calls asking for his help.

“People talk about the leaky condo crisis as if it’s over, but it’s not over. It never ended,” he said.”

– 20 years after B.C. inquiry into the leaky condo crisis, it’s still buyer beware

http://www.cbc.ca/news/canada/british-columbia/bc-leaky-condo-crisis-1.4609418

#24 crowdedelevatorfartz on 04.08.18 at 4:29 pm

Wow!

The highest bid came from a mortgage broker no less.
Greater fools and their greed.
Denial is not just a river.

Well done Derek.
Hopefully collecting wont be as difficult as winning the Court case…..

#25 crossbordershopper on 04.08.18 at 4:30 pm

good luck collecting, been there done that,
i own nothing for a reason, no stress

#26 dosouth on 04.08.18 at 4:31 pm

No pity really.

It is too bad that more stories like this are not published mainstream to “voluntarily” put the brakes on some of the potential buyers knee jerk, life changing decisions.

Sort of like the decision to put that thing on the front lawn you were sure everyone would love.

#27 Pete on 04.08.18 at 4:31 pm

The -30% markets…in/around GTA…? Thank you

#28 crowdedelevatorfartz on 04.08.18 at 4:31 pm

@#17 barking flea ridden Dawg.

You sound like a former poster here.

Best Place on Earth aka BPOE…..is that YOU?

#29 Whatcha Minnie on 04.08.18 at 4:31 pm

I woke up, a fine Sunday, and I went to my office. Office at Sunday you ask? Well, you gotta do what you gotta do. I had nothing but a protein bar as my meal and I worked the entire day.

Then I made this article which I am about to share here. I wrote about the lady of my life and shared it to the rest of the world, just like I am doing here: Was a fine summer day when she walked into my life. The smile on her face is something I would never forget. Was a nobody back then, I. Had not even known back then what on earth blogging is, let alone be one (an awesome one at that for that matter), and the only thing that came to my mind was that happens whatever may, I got to get her.

#30 crowdedelevatorfartz on 04.08.18 at 4:33 pm

@#14 Old Stock the beer

“Prepare for smog, pollution, traffic and terrible social life in Toronto….”
+++++

Ummm, I hate to break it to you but……..

#31 W. Buffet on 04.08.18 at 4:40 pm

Price is what you pay…$$$$$

Value is what you get….!!!

Know the difference.

#32 63 cent Loonie? on 04.08.18 at 4:45 pm

https://www.bnn.ca/loonie-could-fall-to-63-u-s-cents-by-end-of-2019-currency-expert-1.1049193
One currency expert says there are “a lot of reasons” the Canadian dollar could drop to 63 cents against the greenback by the end of next year.
++++++++++++++++++++++++++
Will Poloz cut interest rates in response to a 63 cent Loonie? What happens if oil prices rise, but our loonie collapses from 78 cents to 63 cents? Won’t that trigger hyper-inflation, but with uptight opposite genders and cold climate?

#33 i,see,debt.people on 04.08.18 at 4:49 pm

Home truths: The financial product that turned into a $207-billion debt trap

How a generation of Canadians bit into home-equity lines of credit and ended up renting their homes from the banks, living beyond their means and sacrificing their nest eggs

Pamela Capraru’s long-term financial plan was overturned by a home renovation that went far over budget.

“It’s really the reno that kind of threw everything into disarray,” said the freelance editor, who lives in Toronto’s Leslieville neighbourhood.

Self-employed after being laid off several times from downsizing magazines, Ms. Capraru, 59, has absorbed three interest-rate increases by the Bank of Canada since July, maintaining her payments on the $70,000 outstanding on her home-equity line of credit, as well as a variable-rate mortgage and $41,000 in credit card debt.

But she doesn’t believe she could cope if interest rates were to spike sharply: “I’d be thinking about selling my house and moving to a smaller community,” she said

With consumer-debt levels soaring in Canada, people like Ms. Capraru are struggling with growing payments as interest rates climb from historic lows – especially people with large outstanding balances on home-equity lines of credit (HELOCs).

In 2017 alone, customers of Canada’s six largest banks borrowed $14.4-billion more on their HELOCs than they repaid, pushing such borrowing to a record $207-billion as of Oct. 31 – up 7.5 per cent from a year earlier, according to a Globe and Mail analysis of the banks’ financial reports.

Spurred by soaring house values, HELOCs – which allow people to borrow against the equity they have in their homes – have become the key household credit source for Canadians, now accounting for 40 per cent of all non-mortgage consumer debt, according to a 2017 report by the Financial Consumer Agency of Canada. Credit cards, by comparison, represent about 15 per cent of non-mortgage debt.

HELOC borrowing isn’t a problem, of course, for people who can afford the monthly interest costs. But unlike loans with fixed rates of interest, HELOC costs go up each time the Bank of Canada raises interest rates because most of these lines of credit are directly linked to the prime lending rates of banks. The result is a population that is increasingly vulnerable to shocks if rates climb quickly.

With the central bank now in rate-raising mode, Laurie Campbell worries that even small rate increases will have an oversized impact on borrowers who are also facing rising mortgage payments. The chief executive officer of Toronto-based Credit Canada Debt Solutions, a not-for-profit agency that provides free financial counselling, says she fears that problems for the most vulnerable borrowers will crystallize this spring as a wave of mortgages come up for renewal. Some of her agency’s clients plan to list their houses to repay debts, and she is concerned they will not get the price they need in the soft Toronto market.

“It makes me feel a little bit nauseous – I just think we’re in a really dangerous situation right now.”
Climbing balances

HELOC use began growing sharply in the early 2000s as banks increasingly provided the credit lines as a standard add-on to new mortgages, discovering a consumer appetite for a product with lower interest rates than credit cards and a far larger borrowing limit. From a lender’s perspective, they are virtually risk-free because the borrowing is fully secured against a home.

The Financial Consumer Agency of Canada (FCAC), which is responsible for promoting financial awareness, estimates that 80 per cent of HELOCs in Canada are “readvanceable,” meaning the borrowing limit automatically grows as customers make mortgage payments, increasing the amount of equity they have in their home. Combined with soaring home prices, borrowing can increase for years without hitting the sort of limit that is typical with credit cards.

Between 2000 and 2010, outstanding balances in Canada climbed by an average annualized rate of 20 per cent, according to the FCAC – from $35-billion to about $186-billion.

The borrowing slowed sharply after the recession in 2009, but outstanding balances rose 3.1 per cent in 2016 and spiked again in 2017, up 7.5 per cent, according to data from the financial reports of the Big Six banks. During the two years ended Oct. 31, Canadians increased their HELOC debt by more than $10-billion.
Balance for loans to individuals for non-business purposes, secured by residential property (includes HELOCs)
In billions of dollars

James Laird, president of Toronto-based mortgage brokerage CanWise Financial, said one reason for the spike in 2017 may have been the federal government’s mortgage rule changes introduced in late 2016, which prohibited banks from obtaining bulk insurance from mortgage insurers such as Canada Mortgage and Housing Corp. for their portfolios of refinanced mortgages.

Mortgage refinancing allows borrowers to increase the size of an existing mortgage to extract equity from a home, but HELOCs have become a somewhat more appealing alternative because lenders have raised interest rates for refinancings as a response to the mortgage rule change.

“If it doesn’t cost you too much more to keep the flexibility of having as much money in or out of the line of credit whenever you want, you’d prefer that for sure,” Mr. Laird said.

Rising home values in Vancouver and Toronto have also spurred HELOC growth by quickly giving Canadians more equity to borrow against. And the high cost of housing in both cities has left people juggling larger mortgage payments, creating more incentive to dip into HELOCs to cover day-to-day living expenses.

Canadian Imperial Bank of Commerce reported that 57 per cent of the growth in clients’ HELOC balances in 2017 came from the Greater Toronto Area, with a further 14 per cent coming from Greater Vancouver.

Mr. Laird also believes that part of the growth is the result of lenders increasingly advertising them for a much wider range of purposes than their traditional use for home renovations and repairs. They are pitched as a good cash source for the self-employed with variable incomes and a good way to finance a small business. Growing numbers of people use their credit lines to make down payments on investment properties or to help their children with down payments.

Mr. Laird says he is also seeing seniors use them as a cheaper alternative to a reverse mortgage, allowing them to draw money each month from their home equity to fund living costs. The balance on a HELOC will eventually be repaid when the house is sold, often after the borrower has died.

“Over all with the equity being there, people are finding many uses for it,” he said.
Wealth erosion

Patricia Irwin, a resident of Vernon, B.C., almost lost her house because of her HELOC borrowing.

The credit line was initially “wonderful,” allowing her to borrow as needed to cover monthly shortfalls without taking out a large fixed loan. But within a couple of years she was juggling two lines of credit, drowning in debt and paying only the interest to keep up with her mortgage payments.

“I was very close to losing my house. I could feel my nose on the pavement,” she said.

Ms. Irwin, 62, turned to credit counselling for help and developed a repayment plan, which will see her pay off the last of her non-mortgage debt this year. Instead of relying on a line of credit to stabilize her income or pay for emergency costs, she is building up savings to keep on hand for the unexpected.

The broader impacts of HELOC growth are becoming clearer as Canada moves through the second decade since the popularity of the products took off.

Experts say these lines of credit are contributing to debt persistence by allowing homeowners to borrow large amounts without having to make payments on the principal. Canadians can borrow as much as 65 per cent of the equity in their house while paying only the interest costs and can borrow as much as 80 per cent if they make scheduled principal repayments on the portion above 65 per cent.

Unlike traditional mortgages, which force even the worst savers to accumulate wealth in their house before retiring, HELOCs can lead to wealth erosion, ultimately allowing people to retire with large debts rather than large amounts of home equity.

“The days of being able to have a ‘burn-the-mortgage’ party aren’t going to happen as fast or as often if individuals continue to have [HELOC] debt on their homes,” said Brigitte Goulard, deputy commissioner of the FCAC.

“A HELOC makes it so that you can pretty much use your house as an ATM and use the equity you have for trips or clothes or other expenses that do not improve the value of your home.”

Only about 20 per cent of Canadian homeowners have a HELOC, but those who have one tend to use it, according to data from Mortgage Professionals Canada, an industry association for the mortgage sector. The organization estimated in a 2016 report that just 23 per cent of households with a HELOC had no outstanding balance, while 77 per cent were using their line of credit.

There are about three million HELOC accounts in Canada with an average outstanding balance of $70,000, the FCAC said. The average mortgage in Canada is $192,000, according to Mortgage Professionals Canada.

Scott Hannah, chief executive of the Credit Counselling Society in the Vancouver suburb of New Westminster, has worked with many homeowners who find it hard to resist the temptation of HELOCs to fund lifestyles they cannot truly afford.

“With HELOCs, they are so convenient that people who aren’t managing effectively are the ones who can be hurt the most, because every time they’re short, they just dip into their HELOC,” he said.

Because the required monthly payment is so low when borrowers only pay interest, Mr. Hannah said some people don’t fully grasp that they’re living beyond their means until they hit their borrowing limit. A balance of $100,000 at 5-per-cent interest, for example, costs $417 a month when the borrower is paying interest only, giving them a false sense that their debt is manageable.

Mr. Hannah had a client who had been retired for three years and was proud of having no mortgage. But when questioned further, he said he owed $150,000 on a HELOC.

“I said to him that whether it’s a mortgage or a HELOC, it’s still debt,” Mr. Hannah said.

#34 Rargary on 04.08.18 at 4:53 pm

In comparison, McMansions in Calgary are so affordable. 1.2 $million here would be a luxury home close to downtown! Not a big box on the outskirts.

#35 Linda on 04.08.18 at 5:01 pm

Read one of the news articles regarding the Oakville situation. The Oakville buyers made some unfortunate choices, beginning with a firm offer to purchase when they had not already listed/sold their existing homes. Obviously they believed they would be able to sell at the purchase price of the new house; I would be very surprised if the buyers were not counting on their current homes selling for even more than the value of the homes just purchased with the anticipated net result of either a fully paid for house or a much reduced mortgage at the end of the day.

So now they are in the ‘shoulda/woulda/coulda’ state of those who gambled & lost. Hopefully they will be able to recover in time & restrict any future gambling impulses to the purchase of the occasional lottery ticket.

#36 Lawnboy on 04.08.18 at 5:07 pm

#15;

1. Big D has yet to get his judgement. The lien comes after non payment and is up to the court, to allow the motion (a solution to a problem). It goes from there, all of this takes a pro, not for mortals. He may never see the “ made whole” award.

2. This all smells like Calgary 81-82 ish….it’s all been done before boys n girls.

That said, it’s a contract. BTW, where was the down payment ?

#37 Frank Blood on 04.08.18 at 5:15 pm

That realtor/broker is a slimy cockroach. I hope Derek is able to collect and if the cockroach makes it difficult then play hardball.

#38 gfd on 04.08.18 at 5:16 pm

#2 Technical analysis? on 04.08.18 at 2:48 pm
and now he has to collect. good luck.

Lawyer registers judgment on the title of that house they’re selling and if there is enough meat from proceeds after 1st/2nd mortgages and unpaid property taxes, then that’s that. Take money to satisfy the judgment. The rest will be wiped out in personal bankruptcy. Maybe they too, mortgage agents, should be asking the government for some subsidy.

#39 Lost...but not leased on 04.08.18 at 5:18 pm

“It’s a wOnderful Life”…err laugh

The mOther of all RE cluster-phorques is dawning…

We have on the menu:

—People trying to weasel out of legal RE purchase contracts…

—Developers apparently able to weasel out out of Condo pre-sales.

—B-20, Stress tests etc. with bull$ eye$ on potential purchasers

—A large % of existing mortgages coming up for renewal

—most RE markets peaking..lots of underwater owners

What could possibly go worrooong?
…or to the contrary if you none of the aforementioned applies to you…congrats..a combination of brains and luck.

#40 Long Branch Apprentice on 04.08.18 at 5:30 pm

The GTA is home to many financial retards.

#41 Cici on 04.08.18 at 5:34 pm

Is Derek greedy or opportunistic?

I don’t know or care, and neither should anyone else because it doesn’t matter. He’s guilty of nothing. The sellers decided to buy of their own accord, and then decided to reneg on a contractual obligation.

Blows me away that buyers blame sellers when the market crumbles.

People need to use their brains before crying for sympathy and compassion.

#42 Self Esteem on 04.08.18 at 5:40 pm

There is just one question here…what is your self esteem based on?….faith or FOMO materialism…when you have low self your values are based on materialism ….you get into trouble by trying to keep up with the Jones-es…you become afraid not to fit in ..you borrow to look good…show your fake friends what you have….become a debt slave….Look at that looser driving that old car….haha he has a flip phone ..when is the last time he has been on vacation?…we feel like gods in Cuba…sad to see the system eating up so many people…sad to see so many cars like cockroaches on wheels…rushing to and fro…were we put on the planet to live live this….buy less..enjoy more real time with fellow humanoids

#43 FOUR FINGERS WATSON on 04.08.18 at 5:44 pm

#29 Whatcha Minnie on 04.08.18 at 4:31 pm
I woke up, a fine Sunday, and I went to my office. Office at Sunday you ask? Well, you gotta do what you gotta do. I had nothing but a protein bar as my meal and I worked the entire day.

Then I made this article which I am about to share here. I wrote about the lady of my life and shared it to the rest of the world, just like I am doing here: Was a fine summer day when she walked into my life. The smile on her face is something I would never forget. Was a nobody back then, I. Had not even known back then what on earth blogging is, let alone be one (an awesome one at that for that matter), and the only thing that came to my mind was that happens whatever may, I got to get her.
……………………………………..

Dude. I woke up with a hangover this morning but I sure had fun at the Mud Pit last night. You really showed those nude midgets how to rassle. They sure are slippery aren’t they ?

#44 Asterix1 on 04.08.18 at 5:44 pm

RE prices in GTA are heading south for a while (condos are next in line, timber!!!), you cant stop this. Too many negatives, not enough positives to lift this fat hippo with broken legs up.

Maybe, just maybe if salaries were actually going up, by a lot! But they are not, its the other way around.

“Why Canadians can’t stop borrowing: Stagnating incomes”
https://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/why-canadians-cant-stop-borrowing/article33627676/

“Average hourly wages in Canada have barely budged in 40 years”
https://globalnews.ca/news/3531614/average-hourly-wage-canada-stagnant/

Its time to face the truth. It’s not pretty for most. Renting is definitely the best option at the moment.

#45 Willy H on 04.08.18 at 5:52 pm

Lot’s of Alberta licence plates on the 400 lately!

Looks like a west-east migration is in full swing.

#46 Bibi on 04.08.18 at 6:03 pm

He will never be able to collect. They will just sell their house and hide the cash. No money, no collection.

Mortgage brokers are registered. Stop thinking like a 10-year-old. – Garth

#47 BurlingtonShyster on 04.08.18 at 6:07 pm

#5 BurlingtonShyster on 04.08.18 at 3:06 pm
Much more to come? Last week you said it makes sense to buy in 15% down markets….Oakville is one of those markets

https://docs.google.com/spreadsheets/d/1HZc4PUMTkiQQQ2y6XZjpkPpzpO5KDbXLNU-NJlxgQjU/edit?ts=5a7cde9c#gid=2137854922

Oakville is going to be decimated over the next 2 years

I said in -30% markets. – Garth

————————————————————–

-30% markets? They dont exist……yet. Give it a year

Do some research: “Markham detached home sales down 45.2%, active listings up 206.2% year-over-year (YoY) TTM Sales to active listings ratio (SALR) is trending downward Average Markham detached home price is down 27.6% YoY.” Here. – Garth

#48 Reynolds531 on 04.08.18 at 6:12 pm

I hope he collects, but mortgage broker strikes me as a slip knot profession. If they pull her license would she just go sell cars, appliances, business to business?

All these horror stories just confirming my long held belief that most people don’t get that everyone else in the room is making money off the sale. And their interests usually don’t align with the people they are working for.

#49 Honey Dripper on 04.08.18 at 6:16 pm

So many condo owners just got back deposits because the builder says they can’t secure financing. The units (some) were priced at 335K.

The same condos in surrounding area are now going for over 400K. Now they are priced out of the market.
Making a 2 year commitment on a box in the sky has been a losing investment for awhile now.

#50 SimplyPut7 on 04.08.18 at 6:17 pm

It sounds like it’s a great time to be a lawyer.

For every home being constructed in Toronto, buyers will find out due to B20, rising rates, change in market psychology; there will probably be a gap between the price of the new house compared to what they can get for their old place and/or what their bank or private lender is willing to lend them.

With 20k condos completed every year until 2021 in the GTA and thousands of single detached houses and townhouses under construction. How long does it take the different level of government, banks, and shareholders to realize, the GTA may have a serious problem?

This looks like it will take at least 10 years to be resolved, it will probably take another year or two for speculators to realize they need to stop buying homes/condos they have no intention of paying for, or they may be the one paying off the mortgage or losing their house to pay off the investment, because they gambled most of their net worth on a ‘sure thing’.

Hopefully, by then Ontario has a better functioning housing and infrastructure plan that grows with the population of Ontario so people do not think we are running out of land and buyers pay any price the seller demands a home for fear of missing out on this once in a lifetime opportunity.

#51 LivinLarge on 04.08.18 at 6:21 pm

“Well, now Derek has to collect, and is heartened to know the defeated sellers have listed their house. He will be made whole, he believes.” Sort of depends where Derek’s judgement stands in the line for the money doesn’t it? I’m not thinking like a 10 year old but I have seen many a good judgement lanquish behind secured creditors. As a broker, slapping on a couple of subordinate mortgages when they realized they were sucking hind teat wouldn’t shock me.

That does not shield them from court orders to pay, including garnishees. – Garth

#52 Whimp on 04.08.18 at 6:28 pm

I still want someone to explain how this has happened. Average wages in Canada don’t support these prices. Where is the money coming from?
People can only borrow so much to feed the bubble, then credit freezes up and the bubble pops. Doesn’t matter if it’s you or your mom, it’s still borrowed money and the price of everything is going up so fast that wages will never catch up. I’ve read this blog for years as well as many other investment articles. I still don’t see how home prices in Canada can still be rising like where I live, it defines the laws of the economy, physics, and logic. Why can’t a US style crash happen? All markets are in place, oil prices will climb due to supply/demand and less new discoveries every year, that’ll make prices on everything go up, our cost of living is already insane and most people can’t afford it, thus the rising household debt. Everybody can only borrow so much money before they reach the limit and can’t borrow anymore, then the parties over

#53 tbone on 04.08.18 at 6:29 pm

My Enbridge stock tanked . I’m down a few bucks.
Can I have my money back ,I thought stocks only went up , just like real estate .

Who knew ? Oh ya , I did .

Hope Derek collects , but unlikely .

#54 Leo Trollstoy on 04.08.18 at 6:47 pm

And meanwhile the stressed-out seller had forked over almost $100,000 in legal fees.

why didn’t he hire lawyers on contingency?

the risk of collection would then fall on the lawyers and not on the sellers

#55 Fake News Again on 04.08.18 at 6:50 pm

63 cent Loonie? on 04.08.18 at 4:45 pm
https://www.bnn.ca/loonie-could-fall-to-63-u-s-cents-by-end-of-2019-currency-expert-1.1049193
One currency expert says there are “a lot of reasons” the Canadian dollar could drop to 63 cents against the greenback by the end of next year.
++++++++++++++++++++++++++
Will Poloz cut interest rates in response to a 63 cent Loonie? What happens if oil prices rise, but our loonie collapses from 78 cents to 63 cents? Won’t that trigger hyper-inflation, but with uptight opposite genders and cold climate?

______

So many people have no idea what hyper-inflation is. For there to be hyper-inflation people would have to be buying like crazy which is exactly the opposite as what is going on. Almost everyone we know stayed home for New Years, had a staycation, got rid of one car……The only people living the good life are the people that work for the parasite called GOVT who get regular raises, retire with a giant pension and have all the extra benefits that the plebs like us need to pay for out of pocket.

#56 Leo Trollstoy on 04.08.18 at 7:00 pm

#33 i,see,debt.people on 04.08.18 at 4:49 pm

i see copyright infringement

#57 Alan Dee on 04.08.18 at 7:10 pm

#12 & #15

certainly derek was not in the wrong.

a contract was written and to enforce it to get the full amount of the contract he had to go through some significant hassles. that’s part of business and contracts.

is there some rule somewhere that says its supposed to be easy to collect from people who entered into a bad business deal?

no one need feel sorry for derek …

#58 Mountain_camper_in_tent on 04.08.18 at 7:18 pm

What is FOMO

#59 Happy Housing Crash Everyone! on 04.08.18 at 7:28 pm

#14 Old Stock Canadian
You SHYSTERS have the IQ of a high school drop out and the story telling ability of a 5 year old. You SHYSTERS are a joke.

#60 Lost...but not leased on 04.08.18 at 7:30 pm

UNcommon sense:

Don’t feed the monkey…
Gov’t and banksters won’t ban pre -sales(aka 9o+% are strata…)

Does NOT preclude potential buyers to either individually..or as a group…to boycott this BS business model.

…or ….more succinctly…would you buy a McHappy Meal on a deferred delivery date?

#61 Keith on 04.08.18 at 7:39 pm

Stocks are too risky, say so many people. Yeah, nothing like buying a new house before you’ve sold your existing property. Houses only ever go up, and hot markets only get hotter. Vegas was invented for the logic of these people.

#62 Bby renter on 04.08.18 at 7:41 pm

Flop,

I only see 6008 6th St in Burnaby.
Sold for $2,203,000 on March 8th 2018 after 41 days on the market.

#63 Interstellar Old Yeller on 04.08.18 at 7:43 pm

Thanks for the update, Garth and Derek. Sorry it’s been such a stressful experience for you and your wife, Derek. Hope collection goes smoothly; please update us on how it turns out.

#64 Nonplused on 04.08.18 at 7:49 pm

Wow what an amazing story but I’m glad Derek got his judgement. The buyers should not have been writing checks they can’t cash. People should know that when you sign on the line you have made an agreement and you can’t get out without compensation. Most contracts have an exit clause of some sort, for example business partnerships usually include terms for each partner to buy the other out if something goes south, called a “shotgun clause”. One that I’ve seen basically would have both partners submit a closed bid and once the envelopes were opened whoever bid the highest got to buy the other one out. Happened to a friend of mine.

Real estate used to have exit clauses too, a home inspection and condition of financing being common, sale of the existing home also sometimes being thrown in but sellers don’t like that one it takes too long. But if these quacks bid $200,000 over list without any conditions then they deserved what they got. And if he was a mortgage broker he should have known better.

Although I think the judgement was too high. It should have been the difference between the next highest bid and final sales price because realistically Derek could have taken that bid had the bully bid not been offered so I think that more accurately represents his true loss. Plus legal expenses of course, Canada has a “loser pays” tradition in law which is why there are so fewer frivolous lawsuits in Canada say than in the US. Helps keep people out of divorce court too. I remember my lawyer asking me if I really wanted to argue over the furniture, her idea being if we could settle out of court it would cost a lot less than a new couch. So I basically let my ex keep everything in the house she wanted. In retrospect it was the right decision, there is no point arguing over some things.

And in that respect the deadbeat buyers here made a great mistake in not proposing a settlement. I bet $20 if they had offered Derek the difference between list and final sale price he would have taken it rather than go to court. That would still have been a pretty big touch but probably half the final judgement. Or even if they’d offered the difference between their offer and list he’d probably taken it. But no, they had to drag it out and refuse to admit they screwed up big time.

This is also why contracts made with children under a certain age are unenforceable. I can’t remember if it’s 16 or 18 but basically you can’t contract with a child until they are a certain age because it’s assumed they aren’t mature enough to know what they are signing. But apparently this case shows the age should be raised to 50 for some people.

Anyway, kids, don’t write checks you can’t cash. Never pay more than 4 times your family income for a house unless you are paying the difference with cash (or at least could). Never pay more than half your annual income for a brand new car (it must be new at this level) and drive it for at least 5 years, but preferably until the wheels fall off. Save 10% of your income. Etc. All these old grandma sayings are true, it turns out.

I wonder what is going to happen to all the millennials who bought bitcoin on their credit cards? They say the bitcoin crash is due to tax planning but my understanding is that there is no taxable event until you sell. My guess is that the rout was caused instead by all the banks prohibiting bitcoin transactions on their credit cards, which happened about the same time. The banks looked at it and said to themselves “Wait, why are so many people maxing out their cards buying bitcoin? If this thing blows away how will they pay it back? This is supposed to be consumer credit, not a margin facility!” Plug pulled. Millennials screwed again, but this time they did it to themselves. Well, most times they’ve done it to themselves.

Even in housing they did it to themselves bidding up condos they couldn’t afford. The housing bubble didn’t affect me much because I bought a house when you could actually get one for 4 times annual income. When I wanted a new house in a different location sure I had to pay more than 4 times income but the run up in the price of my old house covered it. I never had to extend 5 to 10 times my income. If I would have, I wouldn’t have bought. If the millennials can figure that out, prices will fall. And I added no incremental demand just statistics because I sold a house for every house I bought, so no new demand.

Although I guess my divorce did add to demand. The way society has gone, with so many people choosing to divorce and live alone I guess that does mean we need one housing unit for every adult rather than the pre-1984 number of 1 housing unit for every 2 adults. Well I guess it’s not quite that because only 50% of marriages result in divorce (amazingly, not sure why the number isn’t 100%), so I guess the actual number is 1.5 housing units for every 2 adults. Still, that’s a lot of extra housing units.

The millennials also screwed themselves in education. When I went to school I took engineering and it was hard work for a lazy student like me, but I got through, got a job, designed some stuff, and made a living. And I lived in my grandmother’s basement and took care of her which was hell because she wouldn’t let girls stay overnight. But that and working in the summer kept the student loans down to $11k ($22k by today’s money) which was reasonable and I could pay it back. Today kids are ramming up $50k in loans to study “international gender studies” and vacation in Mexico on spring break and then they wonder why they are screwed. Some guy with a tenured position tried to talk my daughter into taking a major in “theatrical costume design”, a$$hole, he was just looking for students for his useless program, but luckily I talked her out of it.

There is an attitude that has slipped into the modern consciousness that if there is something you want to and can do, you should do it. In my day we called it “basket weaving”. Well, sure, I suppose you can take a degree in basket weaving if you like and run up all kinds of loans vacationing in Mexico and renting your own apartment so grandma doesn’t keep kicking the girls out, but in the end of the day there is hell to pay. The devil is a harsh negotiator. Worse than a car dealer. At least when you are done with the car dealer you have a car even if you paid too much. With the devil’s student loans it is quite possible to have nothing of any economic value but a big debt.

Wow, I think I covered just about everything today.

Anyway, folks, remember: Everything you decide today will affect your tomorrow, and it will be you that deals with the consequences.

#65 Dr. Talc on 04.08.18 at 8:01 pm

Two days after making the offer, and not long before the Ontario government unveiled a market-killing package of reforms, the buyers showed up and begged Derek to get out of their firm deal.

I would have signed a mutual release at that point and re-sold it for ‘whatever’. Not worth the agro. Within a few days of signing, this deal was definitely not solid.

#66 IKnow on 04.08.18 at 8:12 pm

What’s the chance Derek able to collect?

#67 For those about to flop... on 04.08.18 at 8:15 pm

#56 Bby renter on 04.08.18 at 7:41 pm

Flop,

I only see 6008 6th St in Burnaby.
Sold for $2,203,000 on March 8th 2018 after 41 days on the market.

//////////////////

Hey BR, no problems,one is better than none as they say.

I’m sure the others will come through in time.

Zolo has confirmed the sales,sometimes we just have to wait.

Let’s have a look at the case you had an answer for.

Paid 2.42 February 2017

Sold 2.20 February 2018

And so by the time we chuck in expenses and a little for opportunities lost we are approaching 16% or 350k loss.

As I wrote this morning ,perhaps the most interesting thing about this case is that it is a relatively new build and they still took a loss,not some old heap of crap…

M43BC

6008 6th st ,Burnaby.Paid 2.42 Feb 2017 asking 2.58 now 2.38

https://www.zolo.ca/burnaby-real-estate/6008-6th-street

https://www.bcassessment.ca/Property/Info/QTAwMDAzVzlFNA==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#68 BurlingtonShyster on 04.08.18 at 8:21 pm

47 BurlingtonShyster on 04.08.18 at 6:07 pm
#5 BurlingtonShyster on 04.08.18 at 3:06 pm
Much more to come? Last week you said it makes sense to buy in 15% down markets….Oakville is one of those markets

https://docs.google.com/spreadsheets/d/1HZc4PUMTkiQQQ2y6XZjpkPpzpO5KDbXLNU-NJlxgQjU/edit?ts=5a7cde9c#gid=2137854922

Oakville is going to be decimated over the next 2 years

I said in -30% markets. – Garth

————————————————————–

-30% markets? They dont exist……yet. Give it a year

Do some research: “Markham detached home sales down 45.2%, active listings up 206.2% year-over-year (YoY) TTM Sales to active listings ratio (SALR) is trending downward Average Markham detached home price is down 27.6% YoY.” Here. – Garth

—————————————————————–

Still long way to go my friend….cherry picking the one city out of 12 that was closest to 30% doesn’t mean it’s time to jump in.

30% gets you back to spring 2016 levels. Major market corrections of the past have taken prices back to where they were approximately 5 years earlier…..so when prices get to 2012-ish(at best) prices then we’ll talk bottom

Just admit you were wrong. It’s quicker. – Garth

#69 Gravy Train on 04.08.18 at 8:27 pm

#58 Mountain_camper_in_tent on 04.08.18 at 7:18 pm
“What is FOMO[?]”

Fear of missing out. :)

#70 NOSTRADAMUS on 04.08.18 at 8:29 pm

COMMERCIAL REAL ESTATE-THE FORGOTTEN DOMINO!

Talk about an overvalued market set for a fall. It isn’t just malls becoming empty retail wastelands–it’s corporate Canada shifting to flex-work and work at home, slashing the need for floor after floor of costly business-park office space.
It’s about downsizing, such as restaurants moving to smaller spaces as they move to serving more meals via delivery services.
It’s painfully obvious . Commercial real estate is grossly overbuilt in retail and office space. Combine sky-high valuations with cratering demand and billions in short term loans that must be rolled over into new loans, we have both a liquidity crises, and a pending collateral crisis- the assets supporting the debt are no longer worth the loan balance.
What if I am right and the next crises is a systematic collapse of collateral as an entire sector- retailers holding millions of square feet of bricks and mortar store space—falls off a cliff?
What effect would this have on traditional safe high yield assets held by institutional owners such as pension funds, insurance companies and REITs (real estate investment trusts)?
Unless the Canadian government intends to buy up every dead and dying mall in Canada, this is one crisis that the government can’t bail out with a few digital keystrokes . Question, was there ever in the history of the world a hurting that stayed put? That’s the trouble with it, it moves around. Commercial real estate, looks like you’re in for a world of pain. The teller of truth in the land of gypsies, tramps and thieves.

#71 Reynolds531 on 04.08.18 at 8:40 pm

Because it makes me happy to criticize things, I googled becoming a mortgage broker.

It’s pretty easy….

#72 Harrison Bergeron on 04.08.18 at 8:42 pm

I’m surprised people! Simply dial in any provincial court and voila, every case summary is posted for all to read. All sorts of lovely tidbits of gossip for all to see. Names, incomes and how deep the pool was in the backyard. BC supreme court decisions are the best reading as dentists just can’t seem to control their spending.

#73 FOUR FINGERS WATSON on 04.08.18 at 8:43 pm

Hey Flop. Good job on posting your real estate data. It is interesting and informative. You posted this:

Paid 2.42 February 2017

Sold 2.20 February 2018

And so by the time we chuck in expenses and a little for opportunities lost we are approaching 16% or 350k loss.

That is a very interesting loss, it would bite me hard and would probably hurt most Canuckleheads as well. I wonder who is taking these kinds of losses. Average Canadians? Foreign speculators ? It would be interesting to know…..

#74 Reynolds531 on 04.08.18 at 8:44 pm

Also Garth I’d refer Derek to Articles 6&9 of the mortgage broker code of conduct.

#75 millmech on 04.08.18 at 8:50 pm

#17
Wow, every open house I went to this weekend was like that too, not! The busiest house I was at (went to 18 this weekend) had two other couples looking around. Same line from most of the realtors which was ” seller is motivated and the price is negotiable”. This was in the Fraser Valley prices at $700k and under I will wait as a four of the houses were empty, two smelled horribly of animals and the yards were full of their waste and they were rental houses that would need a six figure remediation to get rid of the smell from the cat urine soaked hardwood floors.
We went to a pub after one of the pet houses for a drink and the waitress said we could get some scraps for our dog, she figured from the smell on our clothes that we were dog owners lol.

#76 Terry on 04.08.18 at 8:57 pm

36 billion dollar LNG project cancelled. Energy east pipeline cancelled. Now it looks like the Kinder Morgan pipeline to BC will be cancelled. This country cannot get it’s act together. This is why capital is leaving Canada. This is why the TSX continues to drift lower and lower in value. This is why our dollar continues to fizzle. Greenpeace activist and climate change crusaders are destroying the future of Canada.

http://theprovince.com/news/local-news/kinder-morgan-to-halt-its-spending-on-trans-mountain-pipeline-due-to-b-c-opposition/wcm/59466cff-ec02-49e4-90e4-44e75cba68fb

http://www.cbc.ca/news/canada/calgary/pacific-northwest-lng-delays-petronas-1.4352004

#77 Decimation on 04.08.18 at 8:57 pm

Oakville is going to be decimated over the next 2 years

Decimation is -10% for a Roman Legion.
Look it up.

#78 Entrepreneur on 04.08.18 at 9:00 pm

A seller could go down the road like Derek, make the buyer pay because it is a contract but he could have ripped up the contract, let it go, and list his house asap. Derek is wasting time trying to be correct, legal and what a headache.

I think that the courts should be neutral on this because as #11 Millennial investor said “not really the ones paying for it.” I think the RE board should be the ones or the banks as they should know what is going on, a downward turn. The wolves are out getting their last piece of raw meat.

Off topic but that 11 year old Toronto girl who said that a man cut her hijab as she was walking to school. I think she wanted to be like the other school kids. And kids do tease. I remember different nationalities in my public school with different apparel but soon changed to look like the other kids, the Canadian way.

#79 maka on 04.08.18 at 9:09 pm

Greed is expensive!!!

I hope real sate agent who contributed to this mess would share the bill. These rouge agents should go to jail.

#80 mark on 04.08.18 at 9:13 pm

The real worth of a financial planner is there “sell” strategy in a market downturn. 10 years ago the tsx was at the same level roughly as today.

Most planners have a deer in headlights look on there face when asked the above.

Investors who sell in a declining market generally get what they fear. – Garth

#81 They’re Back..., on 04.08.18 at 9:14 pm

Had a spare minutes this weekend, so I went to a few open houses in the GTA 905 North.
I couldn’t believe what I witnessed- cars parked on both sides of the road and at least 3 or 4 parties viewing in the 10 minutes I was in the houses. People were still streaming in, even as the end of the open house approached at 4pm,
I talked to the agents and they’re up to their old games.
They’re listing slightly below market value and only accepting offers on offer day. One agent said she started this tactic again just a couple of weeks ago. Agent and seller cockiness seem to be back in the spring market- time will tell if it will impact prices.

#82 Reality is stark on 04.08.18 at 9:25 pm

The beautiful thing about having stupid Canadians obsessed about real estate is the governments ability to overtax the assets through property taxes. Take a look at Toronto city councillor wages and benefits if you want to feel sick. When the appraised value of your home falls the city raises the mill rate and you will still pay more property tax each successive year. Councillors will continue to receive higher and higher outrageous wages.
Keeping the public drunk on housing keeps the people stupid and they gladly overpay property taxes.
If corporations owned the housing stock, a typical Toronto councillor would only make $50,000 per year, a more appropriate wage.

#83 Duke on 04.08.18 at 9:29 pm

#58 Mountain_camper_in_tent on 04.08.18 at 7:18 pm
What is FOMO

===============

Google it, stupid.

#84 Pillboy on 04.08.18 at 9:40 pm

#77

Correct, because the prefix “deci” implies a 10% reduction. It’s too bad that the term is used improperly these days. I’ve always wondered why people never take a Greek and Latin terminology course in University.

#85 Cowtown Cowboy on 04.08.18 at 9:41 pm

I think the first thing premier Kenney should do is hold a referendum on whether Alberta should leave confederation..this country is starting to make me sick

Then YVR will be closer to the GTA. – Garth

#86 not so liquid in calgary on 04.08.18 at 9:43 pm

@ Technical Analysis? on 04.08.18 at 3:21 pm

—————————————————————————-

if you re-read the post, you will find that they (the balking buyers) actually DO have their own home up for sale

#87 not so liquid in calgary on 04.08.18 at 9:51 pm

@ Leo Trollstoy on 04.08.18 at 6:47 pm

——————————————————————————

because when you sue in civil court, you can ask for, and most likely receive, double your court costs

#88 Cowtown Cowboy on 04.08.18 at 9:51 pm

#85 Cowtown Cowboy on 04.08.18 at 9:41 pm
I think the first thing premier Kenney should do is hold a referendum on whether Alberta should leave confederation..this country is starting to make me sick

Then YVR will be closer to the GTA. – Garth

Then all the fools in this country can be together in one place!

#89 young & foolish on 04.08.18 at 9:53 pm

more musings from Sbux:

All this debt, household, corporate, and government … would it not make sense to expect it to impede growth?

#90 not so liquid in calgary on 04.08.18 at 9:56 pm

@ tbone on 04.08.18 at 6:29 pm

——————————————————————————

another naysayer with no court experience. go sit in a courtroom for half a day. lots to learn, and with the right judge, a sense for the comedic a la Garth!

I sat in provincial court once, and howled with laughter as the judge asked the defendant questions, backing her into a corner without her ever realising it

#91 Myra Andrews on 04.08.18 at 9:56 pm

My guess that that the buyers realized they paid way too much and felt sick about it. They acted quickly and tried to cancel the sale within 48 hours.

I suspect the buyers offer was way higher than the other two offers and Derek knew they overpaid. Derek paid $1 million and if he got $2 million he was doing very well.

Within 2 days he knew the deal wasn’t going to go through. Move on and quickly. Couldn’t Derek’s realtor have gone to the second and third highest bidders and see if they still wanted to buy it. If not then relist it for the same $2 million price instead of jacking up the price to $2.25 million (the insane price that the mortgage brokers/buyers were paying). Derek knew he would’t get 2.25 million. He was pouting because he wanted to get the original crazy high price.

The stress he endured was largely brought on by his choices-greed and stubbornness. Ask a stupid high price knowing it wouldn’t sell, then sue and spend $100,000 in legal fees. I doubt he will recover much from the sale of their price.

In legal terms they say “mitigating losses”. Couldn’t Derek have tried to work with the buyers when they first approached him? There were three competing offers. Why couldn’t he have sold it for a bit less to one of the other two bidders? So what if he didn’t get 2.25 million. It was ridiculously high. Greed Derek. Greed. Likely you will pay a high price.

#92 not so liquid in calgary on 04.08.18 at 9:59 pm

@ LivinLarge on 04.08.18 at 6:21 pm
“Well, now Derek has to collect, and is heartened to know the defeated sellers have listed their house. He will be made whole, he believes.” Sort of depends where Derek’s judgement stands in the line for the money doesn’t it? I’m not thinking like a 10 year old but I have seen many a good judgement lanquish behind secured creditors. As a broker, slapping on a couple of subordinate mortgages when they realized they were sucking hind teat wouldn’t shock me.

That does not shield them from court orders to pay, including garnishees. – Garth

—————————————————————————

not to mention, putting themselves into a near bankrupt situation, just as a judgement is to be handed down, would be highly suspect…possibly fraudulent, non?

#93 Smartalox on 04.08.18 at 10:00 pm

I don’t see Derek as exploitative at all in this situation.

The fatal flaw here lies with the sellers, especially in refusing to close. As a Realtor and a Mortgage Broker, that couple had to:

1) Have a non-amateur level understanding the situation and the applicable law, and some expectation of the consequences;
2) The knowledge and contacts to be able to cover their closing costs and take possession of Derek’s home, covering costs until they could re-sell the place on their own. At the very lest, they could have avoided having to pay commission on the deal.

Instead of taking responsibility for their own actions, the failed buyers demonstrated that:

1) their competence levels as ‘professionals’ was seriously in doubt,
2) they doubted their own confidence as professionals, by deciding that they couldn’t finance or sell the property themselves.
3) they stuck somebody else with the consequences of their bad actions. This, to me is the least forgivable.

I’m glad that a precedent was set in this case. I hope that someone can post a reference to the judgement, so that if anyone else is faced with the same situation, the case can be decided swiftly.

And if the names of the ‘professionals’ in question happen to become public as a result of references made to the judgement, the public would be better protected knowing who these ‘professionals’ are, so that they could avoid them.

#94 Tactless on 04.08.18 at 10:03 pm

I like to keep things simple.

Don’t buy anything that experts can’t value. Don’t buy anything that non-experts say its value will always go up.

Time and interest is your friend not your enemy.

#95 Dog in The Fight on 04.08.18 at 10:03 pm

Then YVR will be closer to the GTA. – Garth

Without the money from Alberta the Canadian experiment would collapse. Alberta is a great strategic fit for the US. Since Harper clarified that a Canadian province can leave with anything over 50% in a referendum, so it is fairly easy to do constitutionally. I have been hearing about the nuclear option for Alberta for many years. I never really gave it much thought before. But I think we’re getting closer.

#96 akashic record on 04.08.18 at 10:09 pm

“Spain is one of the countries hardest hit by the European economic crisis. Due to a toxic combination of billions of euros worth of bad loans held by Spanish banks and a real estate bubble that burst in spectacular style in 2007, Spain’s economy now faces multiple simultaneous challenges which it is struggling to deal with within the monetary strictures of the Eurozone. An estimated 3.4 million empty houses, built in a dizzying rush by developers to make the most of cheap loans and favourable government regulation, litter the landscape. Football stadia, railway stations and airports lie abandoned or half-finished and whole towns, planned and half built, are being squatted or pilfered for raw materials.”

https://markelredondo.com/Projects/Sand-Castles/1

https://markelredondo.com/Projects/Sand-Castles-II/1

#97 akashic record on 04.08.18 at 10:14 pm

The mysterious ways of the universe…

Rockefellers Join Soros & Rothschild In Cryptocurrency Investment Plans

https://www.zerohedge.com/news/2018-04-08/rockefeller-familys-3bn-vc-fund-unveils-plans-invest-crypto

#98 Ace Goodheart on 04.08.18 at 10:41 pm

Buyers of new build homes who cannot close due to falling markets are just like snow that is melting as it hits hot pavement. They are not even collateral damage. Like Mayflies, destined for doom.

Bigger picture is the hot pavement itself.

Builders don’t have any of the money they spend to build their housing projects. The land, the labour, all of the raw materials, are purchased using borrowed cash. The idea is get buyer contracts, use the buyer contracts to secure financing, build, and then make money on the spread between what you have to pay back in principal and interest, and what you got from the buyers.

That is how all condos and all new housing developments are built.

So if the buyers aren’t closing, then there is a bigger problem than a few hundred people losing their shirts and taking a bath. We are talking about major loan failures, credit collapse kind of problems. How much do you think the GTA’s new build housing finance industry is worth (including condos?).

#99 For those about to flop... on 04.08.18 at 10:43 pm

Before I start my next post ,I guess I will address the elephant in the room.

Some people probably hurting pretty good on the blog but I’m liking the normalcy.

A couple of people have briefly touched on it ,but with the tragedy happening in Saskatchewan a couple of days ago ,I have been transported back in time 20 plus years to my time in Tasmania as a junior football player.

Many fond memories of those days on those long bus trips,doing whatever you had to do to take your game to the next level or simply to play in the same team as some of your best friends.

The friendships made during this process and the sense of becoming adults together,boys to men, so to speak,lasts a lifetime.

Having said that, I will get back to business and try to find out what happened to the cases.

BR,I put these up last week and I think you were having the week off.

If you can,supply the finishing touches,thank you.

I guess the one I am most interested in is the townhome on Ash,which would answer the question,can you overpay for a 30y.o townhome and still get away with it…

M43BC

3569 KING EDWARD AVE W VANCOUVER paid 2.6 April 2016 ass 2.72 now asking 2.65 sold for?

13697 Malabar Avenue, Surrey paid 1.32 August 2016 ass1.17 asking 1.18 sold for?

6438 Marine Drive, West Vancouver paid 1.28 January 2017 ass 1.26m asking 1.38 sold for?

27 8051 Ash Street, Richmond paid 993k March 2016 asking 969k sold for ?

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#100 Robert on 04.08.18 at 10:44 pm

Here’s a rundown of what happened at that Real Estate Wealth Expo. Looks like it was quite interesting…

https://twitter.com/sdbcraig/status/982705997071507456

#101 morrey on 04.08.18 at 10:49 pm

Flop’s post are totally useless and random. They show basically nothing.

#102 For those about to flop... on 04.08.18 at 11:03 pm

#101 morrey on 04.08.18 at 10:49 pm

Flop’s post are totally useless and random. They show basically nothing.

/////////////////

Thank you morrey,for elevating me to the second dumbest person on this blog…

M43BC

#103 ShawnG in TO on 04.08.18 at 11:07 pm

the dumb buyers and Derek are the lucky ones. the buyer will sell their house, there’s enough equity to pay Derek, and not have debt.

(dumb buyers, because had they settled earlier, sold earlier, they would have more money, and less lawyer fees)

i’ve said this before, those who got wiped out early are lucky because very soon, after 50% in TO house prices, the next dumb buyers will have a underwater mortgage, will not have any money for Derek and their lawyers.

the lack of buyers pushed TO price down 30%, wait ’till you see what panic sellers will do.

#104 Capt. Serious on 04.08.18 at 11:10 pm

A lot of people commenting today apparently do not understand the first thing about contract law.
If anyone is trying to be greedy here, it is the party that signed a contract to purchase an asset and tried to back out because they made a poor investment decision. They made the offer to purchase. Why is this difficult for people to get?

#105 My_Own_Choice on 04.08.18 at 11:22 pm

#81 They’re Back…
I also went to several open houses this weekend in 905 North. However my finding is different.
Unlike last year where tons of people was in the property. I look at the signup log only few names were there.
Sales agents were much more polite and took time to show the property to us.
Before we left, some of them also told us that the listed price is negotiable and the seller was motivated to sell. They will accept offer anytime, no need to bid!

#106 Bob on 04.08.18 at 11:25 pm

This entire episode leaves a bad taste in my mouth. Ethics 101: you don’t take advantage of people. When you see someone behaving in a foolish, self-destructive manner, it’s simply not OK to say “lucky me, pay day!” I think Derek behaved reprehensibly. I’m disappointed that the law is on his side.

#107 Myra Andrews on 04.08.18 at 11:26 pm

You would think that if it sold for fair market value Derek could quickly sell it again a few days later. The buyers tried to renege just 2 days later. Not two months. Big difference.

Is the reason that Derek went after the buyers with such vengeance because he knew he never find another buyer stupid enough to pay that much. Now that is greed.

The buyers were stupid and reckless and Derek was greedy and angry. Deadly combination.

#108 A J on 04.08.18 at 11:40 pm

#100 Robert

Thanks for sharing that lol

What a waste of money!

#109 House Buster on 04.08.18 at 11:48 pm

Oh yeah I feel really sorry for him – he bought his house for less than 1 million and could only sell it for 1.75 million. Yeah he needs a lawyer to get his money.

A sad commentary on society.

#110 Here for a Baloney Sandwitch on 04.09.18 at 12:12 am

Crazy story with the RE speculators – I bet they have flipped houses before so they got caught with the pants down this time – so they deserved to get bu**ered. Losing a million bucks is painful. Personally, I keep my gambling to the stock market. Its the only market where the house loses consistently (up about 7% real returns per year over the last 100+ years). It really comes down to time arbitrage. The quants and hedgies are mostly short term – I use time to beat them. There is no reason for companies like P&G and J&G and Merck etc to go up and down 20% in 6 months. For speculators like me – this is a f-ing gravy train. I use options – sell puts and buy calls on blue chip dividend paying stock – very little risk – no margin interest either. You just rake in the capital gains. If you lose – just roll the position over. I think this bull market has a couple of years more to go. I made $250K last year with a couple of hours work, mostly in my pyjamas. This year wont be as good – I am still positive though. But the $250K will last me at least 3 years. I don’t spend more than 80K (house is paid for). Plus I get 30K in pension.

#111 Here for a Baloney Sandwitch on 04.09.18 at 12:24 am

I hit return too fast.
Continuing …. a meant I work a couple fo hrs a day. I amble down from the bedroom to my study at around 9:30 each weekday morning ..

My technique is to review the 52 week low list of stocks. I select stocks which are solid financially – very little debt – solid companies (no tesla/fangs for me) – I am looking for singles and doubles not home runs.

I place my bets – selling puts – buying calls – mostly near the money. Then I go to the gym – work out for 1:30 hrs. Stop at the pub for lunch and a pint. Head home – review my trades. Take the dog for a walk Read some blogs in the evening. Have a black label or two. Thats it. Great life. I think I have another 20 to go.

#112 fishman on 04.09.18 at 12:27 am

Late June, 7:30 Sunday morning. My Dad & I were up at the gun range sighting in rifles. My classmate was taking his Dad’s empty dump truck out to the gravel pit on the highway a mile & half below us. Around the corner came a 55 Ford convertible,sideways & in the wrong lane. Filled with 7 grade 12 graduates from the little B.C. mining town next to ours. 7 kids dead.

#113 Dolce Vita on 04.09.18 at 12:32 am

#91 Myra Andrews

#114 n1tro on 04.09.18 at 12:46 am

I think I want to grow up and be a contract lawyer.

#115 Dolce Vita on 04.09.18 at 12:48 am

Both Derek and the Brokers are Greater Fools

#91 Myra Andrews summed very well what Derek could or really, should have done right away.

But dear sweet Derek had already made plans for what he was going to do with extra windfall of cash and HEAVEN FORBID anyone taking his candy away…let alone interfering with his retirement plans. He represents nothing more than greed masquerading behind Contract Law.

All he saw was windfall $$$$ signs.

As for the Brokers, which as many here have already pointed out should’ve known better given their profession – and what happens when you eat the book covers in a Contract Law course (and if they never took such a course are even Greater Fools for it).

No sympathy for the Brokers either. The Judge summed it up very well about what they should’ve done.

Greedy, kiting, children born out of wedlock.

What happens when opposing greedy, winner take all, people get together on a deal. No good can ever come out of that and low and behold, it did not.

What a surprise. They both got what was coming to them.

And thanks for the update Garth. Let us know if the Brokers do indeed buck up and how “poor” Derek is making out.

#116 Dolce Vita on 04.09.18 at 1:13 am

#22 FOUR FINGERS WATSON

Agree.

People can say what they want about the benefits of Globalization but at the end of the day it has only benefited a small segment of the population in the developed nations of the West (just compare todays income distribution vs. that from a few decades ago). That evidence is irrefutable.

Money is a finite resource.

For all of a sudden bunch of 3rd World or NICs at best, showing up on our shores with gobs of cash amounts to the wholesale transfer of wealth from the developed West to those nations.

It’s not like the then 3rd World printed the money up and low and behold, we now have a better standard of living. That money had to have come from somewhere and it came from the backs of the lower quartile people living in developed Western nations.

Why the standard of living will go down.

Why people are borrowing like crazy to maintain a lifestyle they cannot afford.

Why people like the Brokers and Derek are embroiling themselves in get rich quick schemes that blew up in their respective faces.

Because there are few ways left in the West to make some significant coin.

Why I think RE in Canada is destined to fall, not go up like so many here wax and pine about in their future scape posts and that actually believe the:

“…if I had a can opener” Economists (insider Economist joke about 3 professions stranded on a desert island with cans of food, no can opener and competing theories about what to do).

#117 Fuzzy Camel on 04.09.18 at 1:19 am

$400k loss is financial wipeout for most Canadians. With this much leverage being given to boobs, I cannot see it ending well.

#118 Dolce Vita on 04.09.18 at 1:31 am

#19 Fake News Again

“…the average Spaniard can’t afford Madrid and the average Italian can’t afford Rome.”

Correct.

Same for Canada in YVR and 416.

The difference being Canada’s economy has not yet blown up in the sense of stagnant or near stagnant GDP as you now have in Spain and Italy.

The affordability of RE in Madrid and Rome to its citizens represent Canada staring in the mirror of what is to come.

Ultimately, and for the exception of Golden Horseshoe manufacturing or what is left of it, we are still a nation of hewers and drawers selling those wares to foreign nations. The rest are doing nothing more than selling Services to each other.

When that hewer and drawer bonanza ends (just look at the NIMBY situation in BC vis a vis AB oil pipelines, planned electrification of transport modes, and the list goes on) YVR and 416 will become the Madrid and Rome of Canada relative to RE affordability for the locals.

#119 Dolce Vita on 04.09.18 at 1:42 am

Re: my prior Madrid and Rome post.

Forgot to add “with RE prices constantly on the decline” (just check the price charts on http://www.immobiliare.it for virtually any city and property type in Italy).

Still unaffordable. That is what is to come in Canada.

And yet, we have a SJW PM full of words and no action.

Spending $100 MM’s on feminism and the like meddling in foreign countries.

Taxing the hell out of the few that actually create jobs, wealth and contribute to GDP growth, trying to redistribute wealth thru taxation and not addressing the real issues about the core wealth generating ability of Canada.

Continue on as we are, with tax and spend Governments with a focus on redistributing what wealth we have left and without any plans to create it, Madrid and Rome unaffordability yet with declining prices is what will be our destiny.

Yet, no one on the horizon to lead our nation out of the morass that is to come.

#120 PastThePeak on 04.09.18 at 2:23 am

#55 Fake News Again on 04.08.18 at 6:50 pm
63 cent Loonie? on 04.08.18 at 4:45 pm
https://www.bnn.ca/loonie-could-fall-to-63-u-s-cents-by-end-of-2019-currency-expert-1.1049193
One currency expert says there are “a lot of reasons” the Canadian dollar could drop to 63 cents against the greenback by the end of next year.
++++++++++++++++++++++++++
Will Poloz cut interest rates in response to a 63 cent Loonie? What happens if oil prices rise, but our loonie collapses from 78 cents to 63 cents? Won’t that trigger hyper-inflation, but with uptight opposite genders and cold climate?

______

So many people have no idea what hyper-inflation is. For there to be hyper-inflation people would have to be buying like crazy which is exactly the opposite as what is going on. Almost everyone we know stayed home for New Years, had a staycation, got rid of one car……The only people living the good life are the people that work for the parasite called GOVT who get regular raises, retire with a giant pension and have all the extra benefits that the plebs like us need to pay for out of pocket.
+++++++++++++++++++++++++++++++++++

I know lots of people in my age group (40’s) living a “pretty good” life (houses, saving for kids education, go on vacation couple times a year, etc), and no – none of them work for the government.

They are hard working professionals in engineering, marketing, business, etc. In most cases the spouse works (part time mostly, some full) and have similar jobs.

Most importantly – they don’t live in GTA or GVR…

#121 NoName on 04.09.18 at 2:58 am

#96 akashic record on 04.08.18 at 10:09 pm
“Spain is one of the countries hardest hit by the European economic crisis. Due to a toxic combination of billions of euros worth of bad loans held by Spanish banks and a real estate bubble that burst in spectacular style in 2007, Spain’s economy now faces multiple simultaneous challenges which it is struggling to deal with within the monetary strictures of the Eurozone. An estimated 3.4 million empty houses, built in a dizzying rush by developers to make the most of cheap loans and favourable government regulation, litter the landscape. Football stadia, railway stations and airports lie abandoned or half-finished and whole towns, planned and half built, are being squatted or pilfered for raw materials.”

https://markelredondo.com/Projects/Sand-Castles/1

https://markelredondo.com/Projects/Sand-Castles-II/1


Few yrs back when piigs were news I posted a link to article regarding Spain and permanent residence status. Basically at hight of the crises they were “selling eu citizenship” for 250k €. I just checked gold visa number price did increased considerably.

Here is something similar from 2012.
https://www.telegraph.co.uk/news/worldnews/europe/spain/9689008/Foreigners-offered-chance-to-stay-in-Spain-for-130000.html

#122 Mike in Toronto on 04.09.18 at 3:47 am

#103 ShawnG in TO

A coworker in Oshawa is in a bind… he bought a new house and his sale of his old one got caught by the downturn.

It’s horrible to hear him talk about discounts of $50k on a $1M property like it’s a huge concession to him.

Suddenly all this mortgage money is real.

We’re not going to see panic sellers unless the economy takes a dive… which he’s very nervous about.

#123 Nathan Clark on 04.09.18 at 4:26 am

Wow. I thought Australians were up the river.

Check out my blog. Lots of swearing and ranting and sexy graphs. Sexy AUSTRALIAN graphs.

http://homdom.blogspot.com.au/

#124 Tax Bob on 04.09.18 at 6:52 am

Use taxpayer money to support idiots who bought more than they could afford thinking they’d get rich and are now SCREWED. As a socialist country I wouldn’t put it past Canada.

#125 NoName on 04.09.18 at 6:59 am

@ Option dude

I made $250K last year with a couple of hours work, mostly in my pyjamas. This year wont be as good – I am still positive though. But the $250K will last me at least 3 years. I don’t spend more than 80K (house is paid for). Plus I get 30K in pension.

How’s is that making sense, my understanding is that option traders love volotility. They can trade more often.

Friend of mine, he loved options, when he went to sick leave only way to support family was to trade because LT insurance was @#$&+& him over for no reason. We would talk on a Skype he he was telling about some of his position, and trades I would get excited like kid in a candy store.
Here is a book he told me teacher my self from. I remember we were working graveyard shift together way back, and we were going through pages learning. Problem was his own was probably past 155 at age of 50-ish, while I am not stupid my self (ok that is debatable) sometimes he spent hours trying to explain math to me when I had hard time following. It was funny we both talked with heavy accent, over the time I spent so much time with him that I could understand almost 100 percentage what he was talking about. Only me out of all people in plant.

Anyway back to you why you will make less money this year?

#126 Gravy Train on 04.09.18 at 7:05 am

#116 Dolce Vita on 04.09.18 at 1:13 am
“… ‘[I]f I had a can opener’ [e]conomists….”

The insider joke about economists is even funnier when you say, “Assume we have a can opener.” (Economists are notorious for stating their assumptions within economic models.)

#127 under the radar on 04.09.18 at 7:13 am

Derek has judgment now he issues a writ of seizure and sale which gets filed in the land registry office where the sellers property is located. When its sold he collects , assuming there is equity and the prior mortgagees are paid in full. He cannot force a sale until the writ has been filed for 6 months. Oh and to those who think the seller can now play games by further encumbering- would be set aside in a minute. Fraudulent preference. Now try collecting against a foreign national from China or Iran who has left the country . Derek got lucky as he presumably has a solvent seller with a house , which is why he sued.

#128 Ace Goodheart on 04.09.18 at 7:34 am

This has to be a misprint:

https://www.thestar.com/life/homes/2018/04/06/440000-in-clanton-park-175-million-in-harbourfront-what-these-condos-got.html

$2255.25 in maintenance fees per month? That is $27,063.00 per year.

#129 neo on 04.09.18 at 7:41 am

Garth is taking a parabolic move last year that got wiped out and telling everybody it is time to buy. How so? This 30% in north Toronto just brings us back to 2016 which also had a smaller parabolic move higher. Prices were still higher overall in 2017 and 2016. You are giving the impression that this 30% is a big move like the 90’s 30% move was. Prices north of HWY 7 are still historically very high. We haven’t even solidified that 2018 prices for the year will be lower than 2017 in the GTA yet. If looks like it will happen but it’s only April. When you have a severe pull back in any asset after a parabolic move the time to buy isn’t necessary on the first pullback.

First, I’m not ‘telling everybody it is time to buy.’ A silly comment since the message here has always been of balance and prudence, and my comments were area-specific. Exaggeration makes your argument even weaker. Second, a 30% price cut cancels a 50% price gain. It’s significant. Third, a drop in asking prices usually means there is more discount to come through an actual offer. Try it. Finally, the world is shifting into a high-rate, higher-growth and more inflationary mode. Prices are not dropping 70%. Or even 50%. But you will see. – Garth

#130 crowdedelevatorfartz on 04.09.18 at 8:22 am

@#102 Flop
“Thank you morrey,for elevating me to the second dumbest person on this blog…”
>>>>>>>

AHahahha.
While Moroney has 1st place locked in
I’d say there’s lots of other people vying for 2nd, 3rd, etc.

#131 Tony on 04.09.18 at 8:24 am

Re: #5 BurlingtonShyster on 04.08.18 at 3:06 pm

When the average car on the road in Oakville is 20 plus years old and older than any city in the entire GTA that should tell you something about what the average house should cost in Oakville. Outside of one rich area Oakville is the poorest city I’ve ever driven through in Ontario.

#132 Steven Rowlandson on 04.09.18 at 8:31 am

This situation is more insane than my proposed policy of capping home prices at three years pay at minimum wage with violators being charged with genocide.
This situation will end badly and trigger a debt crisis that may be too big to easily paper over and might have an impact on government debt. The 2008 crisis might well pale into insignificance.

#133 crowdedelevatorfartz on 04.09.18 at 8:31 am

@#88 Cowtown Cowboy
“Then all the fools in this country can be together in one place!”
++++++
Alberta?

#134 Tony on 04.09.18 at 8:32 am

Re: #14 Old Stock Canadian on 04.08.18 at 3:36 pm

Canada needs to institute minimum speed law limits like America and enforce them.

#135 Incubus on 04.09.18 at 9:01 am

“And meanwhile the stressed-out seller had forked over almost $100,000 in legal fees.”

I don’t understand that amount ?
The case is very simple, how can they justify that bill?

Finally, why they needed a lawyer, you do the process by yourself.

#136 PastThePeak on 04.09.18 at 9:03 am

#14 Old Stock Canadian on 04.08.18 at 3:36 pm
Toronto is a growing city. …

My estimate is that the population of Toronto will increase from our current 3,000,000 to 8,000,000 by 2028. Prepare for smog, pollution, traffic and terrible social life in Toronto.
++++++++++++++++++++++++++++++++

Well, many people on this blog seem to think the same thing as well. Toronto will accelerate its population growth, swelling to look like HK. Housing will continue to march upwards without limit. In 10 years time the average for a SFD will be $3+M. Everyone will be in debt servitude for life.

Meanwhile, down the road at some smaller cities, population growth will be reasonable, and housing will be 1/3 to 1/4, or even less, than what it is in Toronto.

Can’t see businesses wanting to pay their TO staff multiples more than what they could pay in other cities, which means wage growth will stay roughly what it is, and such astronomical TO housing will be paid for with yet greater debt levels than today.

Oh well…it is the centre of the universe…

#137 Tony on 04.09.18 at 9:10 am

My brother sold his house in Markham to a realtor/broker back in November 2016. The house is still rented out but has dropped a lot in value. My brother saved some money on commission he got a rebate cheque since the buyer is a realtor/broker.

#138 neo on 04.09.18 at 9:26 am

First, I’m not ‘telling everybody it is time to buy.’ A silly comment since the message here has always been of balance and prudence, and my comments were area-specific. Exaggeration makes your argument even weaker. Second, a 30% price cut cancels a 50% price gain. It’s significant. Third, a drop in asking prices usually means there is more discount to come through an actual offer. Try it. Finally, the world is shifting into a high-rate, higher-growth and more inflationary mode. Prices are not dropping 70%. Or even 50%. But you will see. – Garth

I am not saying prices will drop 50-70%. That’s silly. But I expect prices to drop at least a REAL 30% like they did in the 1990’s and take 10 years to get back to Spring 2017 numbers. My point is even in North Toronto we need to ignore 2017 numbers altogether, even 2016. Those were parabolic moves. That 50% gain in North Toronto occurred in a little over 12 months after prices were already well out out reach for the community. Wiping out those blow off top gains isn’t as dramatic an actual move as you are making them out to be. Those gains were never sustainable in the first place.

#139 Tony on 04.09.18 at 9:30 am

Re: #110 Here for a Baloney Sandwitch on 04.09.18 at 12:12 am

The stock market was supposed to implode 1929 style by the world elite when Hillary won the Presidency. Through fate Trump somehow won changing the future. Once Trump is gone you’ll get your chance for extreme volatility.

#140 Bytor the Snow Dog on 04.09.18 at 9:33 am

$100,000 in legal fees for a simple contract matter? We know who the real shysters are…

#141 Alistair McLaughlin on 04.09.18 at 9:41 am

#65 Dr. Talc on 04.08.18 at 8:01 pm
I would have signed a mutual release at that point and re-sold it for ‘whatever’. Not worth the agro. Within a few days of signing, this deal was definitely not solid.

Bingo. Derek is 100% right. But you can tell he’s not a businessman. Anyone with experience running a business would know that there is a vast difference between being right and getting paid. The judgement does not guarantee payment. In fact, it merely guarantees Derek’s place in line for a claim on the couples’ assets.

He could have released them, kept the deposit, relisted immediately, and gotten maybe $1.9 Mill, plus their $100K deposit, for a cool $ 2 million. And avoided a year of stress and legal fees. Instead, he’s got $1.7 M, plus the deposit, plus a $480K judgement, which may or may not be made good on. Hopefully his lawyers investigated the couples’ finances, and he is reasonably sure that they can sell their house and make good on the judgement without going bankrupt. Otherwise, he’s going to feel awfully foolish playing hardball.

However, the judgement will certainly achieve some greater good if it is publicized more widely than this blog. The market is in dire need of a moral hazard lesson right now. You sign the deal, you suffer the consequences. Seems Mattamy buyers don’t understand that. This judgement can’t be encouraging for them.

Derek’s year of stress did ultimately produce some public good. Whether it produced any good for Derek remains to be seen.

#142 fancy_pants on 04.09.18 at 9:56 am

ouch!

Far worse outcome than if they just carried through with the purchase. With the purchase you at least have the brick and mortar should RE rise again.

this is just straight half a mil out of pocket with nothing to show forth. brutal

#143 Another Deckchair on 04.09.18 at 9:58 am

Finance, Debt, Homeless.

Maybe 30 years ago was watching a TVO program about homeless shelters.

A person, looked about the same age as my dad, was one of the interviewees.

The story went something like – “I had a family, a house, and a business. Business went under, wife left, have debt, and now I’m homeless. It’s tough to find work when you are my age and living in a homeless shelter”.

He did look presentable, nice manners. For me, that was a “Holy S**t” moment.

Thank you Garth, for what you continue to do.

#144 Milton? on 04.09.18 at 10:05 am

spoke with an agent on the weekend. I wonder of his truthfulness and reaching our to anyone that may know Milton housing situation?

he said their are bidding wars ‘daily’. That prices did drop but are on the rise now

i have seen one builder on the area drop listing prices by $100,000!

?

#145 Tater on 04.09.18 at 10:05 am

#110 Here for a Baloney Sandwitch on 04.09.18 at 12:12 am
Crazy story with the RE speculators – I bet they have flipped houses before so they got caught with the pants down this time – so they deserved to get bu**ered. Losing a million bucks is painful. Personally, I keep my gambling to the stock market. Its the only market where the house loses consistently (up about 7% real returns per year over the last 100+ years). It really comes down to time arbitrage. The quants and hedgies are mostly short term – I use time to beat them. There is no reason for companies like P&G and J&G and Merck etc to go up and down 20% in 6 months. For speculators like me – this is a f-ing gravy train. I use options – sell puts and buy calls on blue chip dividend paying stock – very little risk – no margin interest either. You just rake in the capital gains. If you lose – just roll the position over. I think this bull market has a couple of years more to go. I made $250K last year with a couple of hours work, mostly in my pyjamas. This year wont be as good – I am still positive though. But the $250K will last me at least 3 years. I don’t spend more than 80K (house is paid for). Plus I get 30K in pension.

—————————————————————–
You’ve been selling options in one of the lowest realized vol regimes in history. When vol comes back you’ll be wiped.

#146 fancy_pants on 04.09.18 at 10:11 am

if prices went up to 2.6 million and Derek said, no not selling anymore, how do you think that would turn out? They would have had him strung and quartered.

The bonus is he gets the difference plus was able to buy (assuming he bought again somewhere) into a softer market.

#147 SimplyPut7 on 04.09.18 at 10:16 am

#128 Ace Goodheart on 04.09.18 at 7:34 am

Probably not a misprint, GTA maintenance fees are very expensive in comparison to Vancouver maintenance fees.

It’s not uncommon for monthly maintenance fees to go from $300 to $600 in 5 – 10 year period and over a $1,000 for much older condos.

It’s the reason I don’t like condos as a cheap alternative to townhouses and detached homes in the GTA. They are not cheaper when you add maintenance fees and risks of special assessments on the building.

#148 Tater on 04.09.18 at 10:20 am

Whoops, said vol, meant skew.

#149 SimplyPut7 on 04.09.18 at 10:21 am

#122 Mike in Toronto on 04.09.18 at 3:47 am

A million for Oshawa?

Yes he should be worried.

#150 Linda on 04.09.18 at 10:30 am

I find it interesting that so many comments are apparently blaming Derek for the decisions made by the realtor purchaser. No one forced that offer, folks. It was made freely, by someone who worked in the industry & who knew full well the consequences.

As for Derek being ‘greedy’. Did I misread the post where Derek indicated the sale of this property was associated with their retirement? If Derek & spouse are part of the cohort who have no pension other than CPP/OAS in their future, then the prudent choice to sell the property ‘at peak’ makes absolute sense. The bully offer by the realtor to secure the property was just the bonus icing on the cake. So what I see isn’t greed, I see someone who is fighting to secure their retirement future & those additional dollars would make a mighty fine hedge against inflation or act as a cushion in case Derek & spouse live longer than anticipated.

#151 neo on 04.09.18 at 10:42 am

Larry Kudlow is now openly supporting a North American currency.

Sounds a lot like the Amero from several years back.

Illuminati confirmed (-;

#152 Bob Dog on 04.09.18 at 10:46 am

Absent the government obsession with mass migration, none of this would have happened.

Canadian immigration levels have has in 0.8% range of the population for decades. There is no ‘mass migration.’ – Garth

#153 neo on 04.09.18 at 10:53 am

#144 Milton? on 04.09.18 at 10:05 am
spoke with an agent on the weekend. I wonder of his truthfulness and reaching our to anyone that may know Milton housing situation?

he said their are bidding wars ‘daily’. That prices did drop but are on the rise now

i have seen one builder on the area drop listing prices by $100,000!

?

********************************************

Dudes lying. Bidding wars died last spring and haven’t come back. Prices sank from the $820,000 peak in March/April to $700,000 since September give or $20,000 and have flatlined since. Even this Spring prices are still in that $700K range.

Anything over $1,000,000 is sitting for months. There is literally almost 2 years of inventory based on how sales have been going so far this year.

Sales down 40%, inventory up 200%, days on the market up 200%. New build Mattamy list prices down $200,000 – $300,000 on detached homes this Spring vs last Spring. Literally nothing good to report other than we haven’t seen the next leg down………yet…

#154 Fish on 04.09.18 at 11:01 am

greed let to be seenen, what if Derek has a mid live crisis and thinks he a rock star and moves to milton and shaks up with whoever he meets and then they get devorce and the poor xwife is left to struggle on her own meanwhile lost

This message brought to you by your Ontario Cannabis Stores. – Garth

#155 Ronaldo on 04.09.18 at 11:08 am

Never mind the crazy housing market. Will be interesting to see how this craziness comes to an end. It appears that it has a lot of legs still. Totally nutso.

http://www.cbc.ca/radio/day6/episode-384-trump-takes-on-amazon-canadian-hip-hop-a-bitcoin-mining-boom-nafta-vs-bar-bands-and-more-1.4605296/bitcoin-rush-what-happens-when-cryptocurrency-miners-come-to-town-1.4605307

#156 SimplyPut7 on 04.09.18 at 11:10 am

There’s a part in the Financial Post article about GTA condo investors I never noticed until Ratespy posted it on Twitter (https://twitter.com/RateSpy):

* 30% of [2017 GTA condo investors paid] an interest rate that is greater than 6%
* 16% of investors [paid] more than 9%
* 23% bought cash (no mortgage)

http://business.financialpost.com/personal-finance/mortgages-real-estate/condo-owners-make-big-gains-but-nearly-half-in-negative-cash-flow-report?utm_term=Autofeed&utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#link_time=1523006271

I wonder if the majority of the 23% were HELOC loans or bank of Mom and Dad?

Having a condo market from as far back as 2011 relying on almost half (48%) of the purchases being condo investors to start the development is a bit weird.

What if the more sophisticated condo investors get spooked and sell their units when they realize there are thousands of local/domestic investors with negative monthly cash flow, that paid 6% to over 9% mortgage rates when rates for better qualified investors were 2% -2.5%?

Doesn’t that mean the 60,000 condos under construction in the GTA could have thousands of buyers like the FOMO buyer who tried to bail on Derek’s purchase?

#157 NotLegalAdvice on 04.09.18 at 11:13 am

I have so many issues with this decision.

1) Even a legally binding contract can be broken, with consequences. The buyer would have lost out on their deposit, but should have been able to walk.

2) For Derek to garnish the Buyer’s pay is going to be hell on it’s own. A court order awarding damages seems easy in theory, but generally speaking, it’s very difficult. Derek may be waiting a long long time before he gets the money he lost.

3) The buyer may still be able to appeal.

I’m interested to see how this plays out.

Great post.

#158 Midnights on 04.09.18 at 11:50 am

Nearly half of Toronto’s condo investors offsetting taxes…
https://m.canadianrealestatemagazine.ca/news/nearly-half-of-torontos-condo-investors-offsetting-taxes-240608.aspx

#159 RentYVR on 04.09.18 at 12:19 pm

Lol so the defendants lost both cash and the house. If they had gone through with the purchase they could have sat back and waited for the housing market to rebound. A fool and his money I guess…

#160 Damifino on 04.09.18 at 12:19 pm

#109 House Buster

A sad commentary on society.
————————————-

Nope. A sad commentary on the vagaries of contract law.

#161 RentYVR on 04.09.18 at 12:22 pm

“In the last few days local media’s been filled with coverage of a group of new-home buyers in Oakville who paid too much for their unbuilt houses in the bubble last spring. The value of those properties has dropped, as have their existing homes..”

This is a bit disingenuous, Garth. The buyers want to continue with the purchase, but they can’t now because the financing rules have change which has nothing to do with the value of the properties.

Read their web site. – Garth

#162 Bobby on 04.09.18 at 12:32 pm

Funny how history repeats itself. This is not new, happened in Ontario after the last major crash in the early 90’s. Lots of people purchased new homes based on what their home was supposedly worth. Many lost out quite badly, losing both homes. Same happened in the US. No, this time isn’t different.
Imagine the buyers response if Derek had said he wanted to cancel the deal because he had an even higher offer.
I once had a realtor sign a deal without reading the contract, one that stated we reduced her commission because of the awfully poor level of her service. She said she wouldn’t honour the contract but after our lawyer called her broker she was more than happy to help.
Many don’t understand what it means to sign a contract.

#163 For those about to flop... on 04.09.18 at 12:47 pm

To be relative to this blog ,they probably should have been comparing start-up costs of an ice-cream parlour,but we go with what we’ve got…

M43BC

“The Cheapest and Most Expensive U.S. Cities to Start a New Company

Founding a new company carries all sorts of risks, not the least of which is the cost associated with leasing an office and hiring employees. But where is the best city to start a new company, and what are the most important factors to consider? We created two new graphs on the ten most expensive and ten cheapest cities in the U.S. for a new company to call home.

We gathered the data from SmartAsset, a personal financial advice website. SmartAsset studied 80 cities and calculated the average costs for starting a new company, including filing fees, office space, utilities, legal and accounting fees, and, most importantly, payroll. To make a fair comparison between cities, SmartAsset assumed a company would need a 1,000-square foot office space and have five full-time employees. We calculated each of these metrics as a percentage of the overall startup cost and turned them into slices on a pie chart. This lets you quickly and easily understand the costs associated with creating a new company in different locations across the U.S.

The first surprise from our graph has to do with payroll. As one might expect, hiring people to run the company is by far the biggest expense. It accounts for over 80% of the total price tag in every city. However, the more affordable cities devote a higher percentage of their budgets to making payroll, topping out at 91.4% in Wichita, KS. Compare that to New York, where only 80.1% of the budget goes toward paying employees. Of course, it is much more expensive in absolute terms to hire people in New York ($316K) than it is in Wichita ($216K).

Less surprisingly, the most significant difference between these places is the cost of office space. New companies only need to pay $15,200 in the cheapest place in our analysis, Chattanooga, TN, which would only be only 6.6% of a startup’s total budget. Compare that to New York, where a comparable office would cost an incredible $69,310, or 17.5%, of their budget. That’s more than 4 times as expensive and could be the sole reason holding the company back from hiring another employee or growing in other ways.

Part of the reason why it costs so much more to start a new company in cities like San Jose or San Francisco is that these places are famous for startups. Entrepreneurs flock to coastal cities instead of the Midwest, creating substantial competition for talent and high rents for prime real estate. Proximity to venture capital is also a serious concern in the startup world.

Despite these inherent benefits of starting a company in one of the more established locations, the good news is that many cities away from the coasts are trying to replicate the experience of Silicon Valley. If you’re seeking a home for your startup, maybe consider one of them instead of the old standbys, and save yourself some of that venture capital cash for other aspects of your business.”

https://howmuch.net/articles/cities-with-lowest-highest-startup-costs

#164 no sympathy on 04.09.18 at 12:49 pm

I am a buyer.

And I have no sympathy for the class of buyers to over extend themselves. Put simply, this group of people has caused my family substantial financial harm.

We lost out on so many bidding wars. And the winning bidders were not some foreigners. The hot market, perpetrated by people who took on risk, adversely affected those who did not take the same risk.

Those Oakville buyers of Matammy homes disgust me, to think now they will use tax money wasting the court system and politician time disgusts me.

Think of all the renters who can’t afford to buy specifically because of their risk taking actions. It’s like the banking liquidity crisis — privatize the gains, socialize the losses.

#165 The real Kip on 04.09.18 at 1:08 pm

Derek’s house must have been quite a nice shack since it still ultimately sold for $1.78-million. From 2.25m to 1.78m is a drop of 21%. Hardly a big deal considering it went up 33% in the year prior to Derek listing it. Derek says it’s not about greed? It’s most definitely about greed.

I’m glad the court sided with Derek, a deal is a deal but this real estate market has greed written all over it.

#166 Myra Andrews on 04.09.18 at 1:11 pm

Did Derek say how much the second and third offers were? I wonder how much higher the winning offer was? Were all three offers close?

#167 re., neo. 'milton' on 04.09.18 at 1:47 pm

okay , thank you for the thorough reply. I challenged him, and he sent this. (and re-iterated how ‘hot’ it is). He said houses for $1 mill are not sitting as per below?

http://v3.torontomls.net/Live/Pages/Public/Link.aspx?Key=559bc5c88ac24805b334e29e519bcee7&App=TREB

#168 Fake News Again on 04.09.18 at 2:18 pm

PastThePeak on 04.09.18 at 2:23 am
#55 Fake News Again on 04.08.18 at 6:50 pm
63 cent Loonie? on 04.08.18 at 4:45 pm
https://www.bnn.ca/loonie-could-fall-to-63-u-s-cents-by-end-of-2019-currency-expert-1.1049193
One currency expert says there are “a lot of reasons” the Canadian dollar could drop to 63 cents against the greenback by the end of next year.
++++++++++++++++++++++++++
Will Poloz cut interest rates in response to a 63 cent Loonie? What happens if oil prices rise, but our loonie collapses from 78 cents to 63 cents? Won’t that trigger hyper-inflation, but with uptight opposite genders and cold climate?

______

So many people have no idea what hyper-inflation is. For there to be hyper-inflation people would have to be buying like crazy which is exactly the opposite as what is going on. Almost everyone we know stayed home for New Years, had a staycation, got rid of one car……The only people living the good life are the people that work for the parasite called GOVT who get regular raises, retire with a giant pension and have all the extra benefits that the plebs like us need to pay for out of pocket.
+++++++++++++++++++++++++++++++++++

I know lots of people in my age group (40’s) living a “pretty good” life (houses, saving for kids education, go on vacation couple times a year, etc), and no – none of them work for the government.

They are hard working professionals in engineering, marketing, business, etc. In most cases the spouse works (part time mostly, some full) and have similar jobs.

Most importantly – they don’t live in GTA or GVR…
________

1. Not everyone can be an engineer or business owner.

2. I would be curious on what percentage of your rich friends are “proxiy” Govt workers AKA contractors that “mostly” get Govt contracts like boat builders, road builders, bridge builders etc etc…….think of bum-bardier and SNC Lavland. Gee….they happen to be from money sucking Quebec of course.

Know any “actual” creators of wealth that don’t suck on the public teat?

#169 Graeme on 04.09.18 at 2:20 pm

Make a deal, honour it, savour the consequences.
It’s so perfect they were realtors too, not that ignorance is an excuse, but they can’t even plead that!!
Adulting is hard sometimes.

#170 Fake News Again on 04.09.18 at 2:25 pm

DELETED

#171 Mattl on 04.09.18 at 2:45 pm

The jealousy in these comments is hillarious. Folks like Myra and Dolce think Derek should let the buyers out of their contract and take a few hundred grand less. I’m sure you would all feel the same way if a seller canceled your purchase a few weeks out from close because a higher offer came in. Right? Or the lease on your vehicle went up because demand for your car had increased. I mean why be greedy right?

It doesn’t matter many back up offers he had or how much he made on the home. Sure its a windfall but its HIS windfall. You never made out well on a transaction?

#172 Hairhead on 04.09.18 at 2:46 pm

Look, I’m a wild-eyed NDP-voting socialist, but even I cannot see how Derek accepting the valuation the buyer made in their offer is the least bit greedy.

“Hi, I will wish to purchase your motorbike for $12,000”

“No, that’s too high. I’ll take the $11,500 that other guy is offering me.”

Does the above not sound nuts?

The price of anything you have to sell is what the informed buyer is willing to pay. And the mortgage broker and spouse were certainly informed buyers, and the contract they signed was both valid and familiar to them.

It’s open-and-shut to me.

#173 Myra Andrews on 04.09.18 at 3:07 pm

For consumer purchases you have 10 days to cancel the contract due to buyers remorse. You got carried away and regret buying it. Doesn’t apply to real estate but does to almost any other purchases. So you can cancel contracts without penalty, just not for real estate the biggest purchase in your life.

#174 Myra Andrews on 04.09.18 at 3:36 pm

#171. No one said Derek should take a few hundred thousand less. There were two other offers. I am guessing they were tens of thousands less. If he kept their deposit plus sold to the second highest bidder he would of have come out alright.

He relisted for $2.25 million when he initially asked 2 million. How come? He must have known it wouldn’t sell for that especially since the initial buyer thought they had overpaid. Get the impression Derek wanted vengeance.

It is a misconception that sellers ‘get to keep’ deposits from buyers when deals collapse. This is not the case. The money is held by the listing broker in a trust account and can only be accessed if a mutual release is signed, or a court orders it. In order to prevent this the APS must contain a specific clause saying the deposit would form a portion of damages in the event the buyer fails to complete the transaction, and is then released to the seller. – Garth

#175 saskatoon on 04.09.18 at 3:38 pm

#172 Hairhead

“I’m a wild-eyed NDP-voting socialist…”

i.e., sociopath

#176 NoName on 04.09.18 at 3:57 pm

#163 For those about to flop…
Chattanooga, TN, and entrepreneurs

few year back i was trying to teach myself about depth of field and i was looking for examples on internet, so come across one picture of hydro pole insulators and photographer from chattanooga, tn.

I’ve been following its work ever since. Also somewhere on her blog she explains how she ditched her teaching job to become full time blogger photographer or something along those lines.
If you have time to check it out definitely do. here are links. each blog deals bit with different topic food, vino, photography, cats (yes cat person) what to do when kids move out etc… if you click time will be well wasted.

http://www.pamelagreer.com
http://www.sidewalkshoes.com
http://www.greyisthenewblack.com
http://www.pamelagreer365.com

#177 AGuyInVancouver on 04.09.18 at 4:16 pm

DELETED

#178 PastThePeak on 04.09.18 at 4:23 pm

#168 Fake News Again on 04.09.18 at 2:18 pm
….
________

1. Not everyone can be an engineer or business owner.

2. I would be curious on what percentage of your rich friends are “proxiy” Govt workers AKA contractors that “mostly” get Govt contracts like boat builders, road builders, bridge builders etc etc…….think of bum-bardier and SNC Lavland. Gee….they happen to be from money sucking Quebec of course.

Know any “actual” creators of wealth that don’t suck on the public teat?
+++++++++++++++++++++++++++++++++++

God you are stupid! Obviously suffering from reading comprehension. Do I know any actual creators wealth – how about the ones I mentioned, you f***ing idiot.

Engineers that work in the telecom sector, that build the internet and mobile networks create wealth dingbat. Sales at the mobile carriers, marketing contractors for small tech companies. Even someone who runs sales education in the the marijuana sector.

Based on your commentary, I am guessing you are a loser that offers no value. You certainly don’t on this site.

#179 SimplyPut7 on 04.09.18 at 4:35 pm

#164 no sympathy on 04.09.18 at 12:49 pm

I had friends go through the same thing in 2015, one ended up not buying (and happy they didn’t), another ended up buying in an area that I don’t think they would have moved to if they thought more options would be available now.

In many areas of the GTA, prices are only at 2016 levels not 2015, so there is still time for them to move before the rate hikes and mortgage renewals under B20 financially ruin the speculators and flippers in the GTA and drive down home prices further.

I’m glad Derek took the buyers to court, I’m sure Mattamy, other builders, sellers and lenders will do the same for people who lined up and bought multiple new homes, made bully offers on resales and went to private lenders to get the largest mortgages possible.

A fool and their money will soon part.

#180 jess on 04.09.18 at 4:36 pm

FBI raids Trump lawyer’s office related to
The FBI on Monday raided the office of President Trump’s personal lawyer, Michael Cohen, and seized emails, tax documents and records related to his payment to adult film star Stormy Daniels

The seized documents also include business records and communications between Cohen and Trump.
By Avery Anapol – 04/09/18 04:00 PM EDT

==========
hey parkland
Remington >cancel $775 million of debt and bring it out of Chapter 11 as soon as May.
U.S. banks provide rescue financing for gunmaker Remington
https://www.reuters.com/article/us-remington-bankruptcy/u-s-banks-provide-rescue-financing-for-gunmaker-remington-idUSKBN1H204F

Without this financial support, the company would have been forced to close. Those funds also facilitate a swift emergence from chapter eleven, helping Remington keep on making guns while it restructures itself.

But Remington faces another problem: a prolonged class action lawsuit surrounding the Sandy Hook killings in 2012, with parents attempting to sue the manufacturer in federal court. By declaring bankruptcy, the company may be able to neatly exclude itself from liability in this case, starting with a clean slate. In a separate legal case, Remington would also be able to dodge responsibility for a settlement regarding a manufacturing defect on one of its rifles.

http://www.truth-out.org/news/item/44103-bankruptcy-won-t-keep-remington-from-producing-guns

#181 Here for a Baloney Sandwitch on 04.09.18 at 4:36 pm

Response to Tater

I have been wiped before – and it won’t be the last. I usually have one good year, one bad year and one mediocre year. Still I make a good 100K a year and don’t pay much taxes if anything.

If you don’t like volatility – you should not be playing options – they are no more risky than fire & TNT – have to be controlled carefully – its all about value & position sizing. Vol is a Value investors friend. The current trend towards passive investing has actually made things better for stock pickers.

#182 Gravy Train on 04.09.18 at 5:08 pm

#170 Fake News Again on 04.09.18 at 2:25 pm
DELETED

What was that again? Could you speak up? :)

#183 Fake News Again on 04.09.18 at 5:11 pm

Fake News Again on 04.09.18 at 2:25 pm
DELETED

No facts allowed on immigration on Garths blog…….only radical left ideology…..no wonder there are so many “govt workers” here….

You have a hard time with facts. – Garth

#184 Gravy Train on 04.09.18 at 5:23 pm

Has anyone been following the breaking news?

“The FBI has raided the offices of Michael Cohen, the long-time personal lawyer for US President Donald Trump.”
http://www.bbc.com/news/world-us-canada-43706709

What say you, Smokey? And you, Fake News Again? :)

#185 AGuyInVancouver on 04.09.18 at 5:37 pm

Really Garth? I thought you had a better sense of humour than that.

Apparently not. – Garth

#186 TnT on 04.09.18 at 5:50 pm

#174 Myra Andrews on 04.09.18 at 3:36 pm

Also note:

Derek had to list for the sold amount as a starting point. If it sells then no issue. Sells for less than he can sue the delta (which is what happened).

If he Listed for less as a starting point and sell for less then there’s no way to sue the delta.

Glad he won the case. Idiot buyers who were certainly knowledged in Real Estate came in playing the “Big Man / Woman / Person” guns a blazing to “win” the deal can suck it large.

#187 TnT on 04.09.18 at 5:56 pm

#173 Myra Andrews on 04.09.18 at 3:07 pm

If you had it your way then any Bidder could game the system, strategic bidding to sideline houses in favour of other listings.

A whole industry of fake top bidders who emerge with no recourse.

#188 Canadian in LA on 04.09.18 at 6:02 pm

Is it really over Garth??? Please say it ain’t so. I love your blog so much. What am I going todo with my 3 min in the afternoon?

#189 Myra Andrews on 04.09.18 at 6:05 pm

#183. Thanks TnT

I had not realized Derek needed to list it for the selling price. Thanks for clarifying.

Could the realtor talk to the second and third bidder and see if they still wanted to buy it? And then try to sue to keep some of the deposit? (per Garth’s comments)

Just wondering if it could have been nipped in the bud sooner and not have to go through a lengthy and costly court battle. He might have ended up with a bit less money but a whole lot less stress.

As it stands now it is not clear how much he will collect. Me thinks the mortgage brokers have a big mortgage and the price of their house has fallen so will end up selling for less than they paid. Not sure how much equity would be left.

#190 TnT on 04.09.18 at 6:35 pm

#189 Myra Andrews on 04.09.18 at 6:05 pm

Best option was for buyer to just keep the house.

Although they paid too much at least they have something AND it would eventually be worth what they paid.

What they actually did was screw up the seller knowing full well of the consequences AND now they will pay a larger penalty.

Flip that around – say if buyer kept the deal and the house prices went higher. Could the seller then take back the deal and ask for more? Nope…..

#191 TnT on 04.09.18 at 6:40 pm

#190 The Technical Analyst, CSTA, CPD on 04.09.18 at 6:09 pm

The answer is YES – we should feel sorry for Derek.

In our society we have laws. Highest bidder wins.

Can’t feel sorry for a Mortgage Broker who screwed over ever other bidder the win the house.

Can’t believe all the Snowflakes here today…

#192 neo on 04.09.18 at 7:30 pm

#167 re., neo. ‘milton’ on 04.09.18 at 1:47 pm
okay , thank you for the thorough reply. I challenged him, and he sent this. (and re-iterated how ‘hot’ it is). He said houses for $1 mill are not sitting as per below?

http://v3.torontomls.net/Live/Pages/Public/Link.aspx?Key=559bc5c88ac24805b334e29e519bcee7&App=TREB

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Tell your realtor friend I have access to all the information he does…and yes…he is lying. That list he has only has 4 houses on it that have sold for over $1 million. The one on 6th sixth doesn’t count because that isn’t urban Milton. I don’t include rural or estate properties out in the Campbellville because they distort things and there are very few of those sales anyway and they take fooorever to sell.

In the past 4 months in urban Milton only 19 homes over $1 million have sold. That is less than 5 a month. Last spring we were almost getting 19 a month. Do you know how many homes are priced over $1 million in urban Milton right now?

70 houses are on MLS right now. Go on Realtor.ca and count them yourself. That’s not two years of inventory but it’s 14 months. We started the year at 50 homes over $1 million fro sale so houses in that segment are not moving. He’s lying.

#193 marc macdonald on 04.09.18 at 9:26 pm

#123 Nathan Clark misery loves company.

#194 Guy in Calgary on 04.10.18 at 12:52 pm

“Derek” will soon learn you cannot draw blood from a stone. He’ll never even get his legals back.