There are Financial Consequences that you may not realize. I have set them out below:
You will lose your deposit plus being responsible for the vendor’s:
1. Legal Fees
2. Utility Fees
3. Mortgage Payments
4. Real Estate Commission
You will also be responsible for the difference of your purchase price and the subsequent selling of the property by the vendor if it’s less than your purchase price.
All of the above will be calculated from the time your purchase should have closed until your vendor is able to sell and close the sale of the property to another purchaser.
Furthermore, if your vendor needed the sale proceeds to purchase a new home then you will in addition also be liable financially for all the above to the person selling to your vendor.
No doubt you will be sued and involved in a lawsuit, which will cost you legal fees. You probably will lose the lawsuit and have a judgment against you. The judgment against you will affect your credit negatively. This may mean that it will difficult to get a mortgage in the future to buy a new home.
Do not believe that you can walk away from purchase with minimal financial consequences. You signed an Agreement of Purchase of Sale and you are bound by it and should honour it.
Stanley Gelman, Q.C.,Jur.Dr.
Stanley Gelman is a Mississauga real estate lawyer. He can be reached by email at firstname.lastname@example.org, phone 905 270 5110.