This is very similar to others that have been posted but definitely a good reminder to many who are looking to buy in a busy, hot, and crazy market like Toronto or surrounding areas. I have watched prices escalate in days as buyers fight to be in certain neighbourhoods.
A buying couple moved into their condo, which they “won” in a bidding war. They went in with a top dollar bid and no conditions of sale and “won” the bidding war. They moved in and the nightmares began.
They were informed that there was a major problem in their unit with plumbing and electrical systems. When they had been there a few weeks the management sent out a letter saying they had been replaced. The board of directors sent out a note informing the owners that their corporation was insolvent and a huge special assessment was required to bring the accounts back to solvency and monthly homeowners fees would increase as well.
What did they do wrong? Many places.
Number 1 – first and foremost NEVER buy a condo without the condition of reviewing the status certificate of the building. These documents show the rules, regulations, and restrictions within the building. As well you are able to see the business accounts and balance sheets for the last 2-3 years. Having 7-10 days to review these documents with your real estate attorney is utmost important.
If buying a re-sale home, always get a home inspection to avoid any surprises when you take possession. That the time and spend the money for your peace of mind. My buyers have never regretted spending the money.
Number 2 – the selling agent should have provided a copy of the status certificate for inspection by all the buyers in an expected multiple offer situation.
Number 3 – The buyer’s agent should have been fired to ever allow the buyer to put themselves in this situation. Depending on what the sales representative advised, they could be held liable in this situation as could their Brokerage out of which they work.
Number 4, the sellers should have been aware of the financial problems of the management and corporation and needed to advise potential buyers of these conditions -which would not have been evident on simply viewing the unit but would have been known to the seller. Failing to disclose such information can lead to litigation.
Buyers need to be aware of the risks they take with any no-conditions offer. It is best advised to get more information, take your time, seek professional advice Outside of a realtor and make an educated decision. Rushing leads to accidents – be it in a car or with buying a home.