The Realities of Financing Conditions in Toronto Real Estate
Often when buyers purchase a house or condo, their offer to the seller will be conditional on financing. Typically, this means that once all of the terms of the offer are accepted by both parties, the buyer will have a certain number of days, (usually 5-7 business days) to satisfy themselves with the financial aspects of the purchase.
While this gives the buyer extra time to check on mortgage rates and have their lender sign off on everything, this is a lousy situation for the seller.
Essentially, the buyer has forced the seller to remove the property from the market for 5-7 days, and seller cannot during this time entertain any other offers. The seller has his hands tied while the buyer makes sure they like the terms of the mortgage or takes time to shop around to other lenders.
In Toronto, we expect that buyers and their realtors are operating in good faith during this conditional time period. Many times, 5 or more days later, the buyer will simply come back and say that they cannot find financing to their satisfaction and not go through with the purchase. There is no way for the seller to know if that is true or if the buyer has found a better property or simply lost interest. In the meantime, the seller may have missed out on better offers that are now long gone.
As a buyer, including a financing condition is usually a smart move. But keep in mind, from the seller’s perspective, it can greatly weaken the buyer’s offer.
Buyers should always know their financing situation before they put in an offer. At The WEIR Team’s offices at 2040 Danforth Avenue, we’ve got an excellent in-house mortgage broker to help you get everything lined up. Contact us today to help make sure your real estate purchase is problem-free.