- Joined
- Apr 9, 2009
- Messages
- 2
Hi folks, newbie investor here.
My wife and I made a crucial mistake in April 2008. We purchased a pre-sale townhouse in Surrey, BC that is due to complete on May 1, 2009.
When we purchased the market was still strong, and we expected no problems obtaining a mortgage to complete on the purchase. Our intention was to rent out our existing condo, move into the new home and start building our portfolio.
Long story short, everyone knows what happened in the market since then. The bank has appraised our property at $387,000, when we paid $446,000 for it. They are asking for the difference before they will issue a mortgage. This is not possible. With the market correction, we no longer have enough equity for a LOC or not nearly enough resources to come up with the required downpayment to complete the purchase. Family assistance is not an option either.
To compound the issue, I lost my job and my wife is starting EI for maternity leave in one week. The baby was a surprise as well! Our financial situation is substantially different when we purchased, much of which was unplanned.
Basically we are unable to complete and that`s the bottom line. I`ve consulted a lawyer who is apparently a shark at finding flaws in pre-sale contracts and disclosure statements, and he is reviewing our case next week. I`m hoping for a miracle.
My question is, if our lawyer does not find a way out for us, and we do not complete, what are the actual implications of this and the likelyhood they would be carried out? Obviously the contract says that the developer could sue for lost sale price, holding costs, legal fees, specific performance etc. I expect at a minimum we will lose our $22,500 deposit.
The lawyers I`ve spoken to about this have given me typical lawyer answers of course "Here is what could happen...here is what the contract says etc.", but I was looking for some more practical advice for anyone who has experience on the matter.
I`m not here looking for sympathy, I realize we gambled and lost. Our plan is to learn from this mistake, move forward and hopefully wipe our hands fairly clean from this transaction.
What is the likelyhood a developer will actually follow through with a lawsuit on this matter? We are in our 20`s, just starting out and our net worth has been wiped out in this transaction, so will the developer pursue it knowing it`s like getting blood from a stone?
If I`m in front of a judge, will some consideration be given to our situation, or will a judgement be determined on whether or not an actual breach of contract took place, not the situation of the purchaser?
Any advice is appreciated. Thanks.
My wife and I made a crucial mistake in April 2008. We purchased a pre-sale townhouse in Surrey, BC that is due to complete on May 1, 2009.
When we purchased the market was still strong, and we expected no problems obtaining a mortgage to complete on the purchase. Our intention was to rent out our existing condo, move into the new home and start building our portfolio.
Long story short, everyone knows what happened in the market since then. The bank has appraised our property at $387,000, when we paid $446,000 for it. They are asking for the difference before they will issue a mortgage. This is not possible. With the market correction, we no longer have enough equity for a LOC or not nearly enough resources to come up with the required downpayment to complete the purchase. Family assistance is not an option either.
To compound the issue, I lost my job and my wife is starting EI for maternity leave in one week. The baby was a surprise as well! Our financial situation is substantially different when we purchased, much of which was unplanned.
Basically we are unable to complete and that`s the bottom line. I`ve consulted a lawyer who is apparently a shark at finding flaws in pre-sale contracts and disclosure statements, and he is reviewing our case next week. I`m hoping for a miracle.
My question is, if our lawyer does not find a way out for us, and we do not complete, what are the actual implications of this and the likelyhood they would be carried out? Obviously the contract says that the developer could sue for lost sale price, holding costs, legal fees, specific performance etc. I expect at a minimum we will lose our $22,500 deposit.
The lawyers I`ve spoken to about this have given me typical lawyer answers of course "Here is what could happen...here is what the contract says etc.", but I was looking for some more practical advice for anyone who has experience on the matter.
I`m not here looking for sympathy, I realize we gambled and lost. Our plan is to learn from this mistake, move forward and hopefully wipe our hands fairly clean from this transaction.
What is the likelyhood a developer will actually follow through with a lawsuit on this matter? We are in our 20`s, just starting out and our net worth has been wiped out in this transaction, so will the developer pursue it knowing it`s like getting blood from a stone?
If I`m in front of a judge, will some consideration be given to our situation, or will a judgement be determined on whether or not an actual breach of contract took place, not the situation of the purchaser?
Any advice is appreciated. Thanks.