Bouncing Back and Moving Forward

That congratulatory bottle of champagne you put on ice? Don’t open it yet.

In a more balanced market like the one we’re experiencing in Toronto, it’s normal for sellers to receive offers that are ‘conditional’ on the buyer meeting specific requirements, like getting financing or a home inspection. Most buyers satisfy and waive their conditions within a week, and the sale moves forward.

But sometimes…the buyer walks away.

When it happens, it can feel like the rug has been pulled out from under you. Here’s your roadmap for bouncing back and moving forward.

Understanding Why Deals Fall Through

Let’s look at the most common scenarios we encounter in Toronto:

Financing Falls Through

Even with a mortgage pre-approval, buyers can face unexpected hurdles in getting their financing sorted during a conditional period. Sometimes:

• Issues arise when the lender verifies income, credit or the source of downpayment
• Interest rates and mortgage costs are higher than the buyer expected
• The property’s appraised value comes in lower than the purchase price and the buyer can’t make up the difference
• The buyer’s employment situation changes
• The lender refuses to finance the particular condominium building
• The buyer is unable to obtain insurance that is satisfactory to the bank

In Toronto, we usually see financing condition clauses that are all-encompassing, meaning that it’s almost a get-out-jail-free card for the buyer. While they have to try to obtain financing in good faith, they don’t usually have to give you the specifics about what happened.

Related: All About the Financing Condition

Home Inspection Issues

When an agreement is conditional on a ‘satisfactory home inspection’, the legal clause commonly used in Ontario gives a wide berth to the buyer. To back out of a deal because of a home inspection, the buyer doesn’t need to prove to you that the roof is leaking or that there’s mould in the basement – they simply can just be: Not Satisfied. Sometimes, it’s not about the actual problems found during the home inspection, but rather:

• Buyers who get spooked by standard maintenance items
• Major unexpected issues that affect financing
• Disagreements about needed repairs
• Cost estimates that exceed the buyer’s budget

When a sale falls through because of a home inspection, it’s important for you and your agent to find out as much as you can and adjust as necessary.

Status Certificate Issues (for condos)

In Toronto, most offers to purchase condos are conditional on their lawyer reviewing the status certificate (the set of documents that sets out the financial/legal health and rules of the condo corporation). Deals can fall through on the status condition because:

• The reserve fund isn’t big enough to pay for projected expenses
• Risky lawsuits, insurance issues or maintenance fee increases are revealed
• The buyer is concerned about a history of special assessments, issues in the building or between the owners
• There are rules the buyer wasn’t expecting (for example: pet size limits or BBQ restrictions)

It’s important to remember that conditions that involve a lawyer ‘being satisifed in their sole and absolute discretion’ are subject to solicitor-client privilege, so the buyer doesn’t have to tell you what their lawyer didn’t like in the status certificate. They can just walk away.

What Happens Now?

The Deposit and Mutual Release

In Ontario, when an agreement to purchase a property falls through during the conditional period:

• The buyer is typically entitled to get their deposit back
• The seller and buyer sign a mutual release, releasing each other from liability
• If there’s a dispute, the deposit remains in trust until resolved

Pro Tip: Don’t agree to release the deposit until you’ve consulted with your agent and/or legal counsel about your options.

Invoke Plan B

Your REALTOR should immediately:

• Perform due diligence on any unexpected issues that came up during the home inspection
• Contact any buyers who expressed serious interest during the first listing
• Reach out to agents who showed the property to understand their clients’ current situation
• Review whether price adjustments or listing changes are needed based on feedback
• Consider whether new photos or staging tweaks could help
• Update the marketing strategy

In Toronto, sale prices aren’t public until deals firm up, meaning only you/your agent and the failed buyer/their agent know the price you agreed to. Use this to your advantage by adjusting your price and/or strategy based on what you learned from the failed deal.

Managing Backup Offers

If you received multiple offers initially:

• Have your agent reach out to the backup offers immediately
• Be transparent about the situation without revealing details
• Consider whether terms might be more important than price this time
• Don’t assume the previous backup offers will stand – be prepared to negotiate

Pro Tip: If you’ve accepted a conditional offer, we (almost) always recommend our sellers continue showing the property during the conditional period. Yes, it’s inconvenient – but it might help you find a backup buyer.

The Emotional Reset

Let’s be real – a failed deal hurts. Here’s how to move forward:

• Give yourself a day to be disappointed, then focus on the strategy
• Remember that many successful sales have a false start
• Use the experience to make your property even more appealing
• Consider each showing a fresh opportunity, not a makeup exam

Moving Forward

Remember, a failed deal isn’t a failed sale – it’s a detour. Many sales had a false start – the key is to use what you’ve learned to make the next deal stick. Stay focused on your goals, trust your agent’s guidance, and remember that the right buyer is still out there.

Keeping that champagne on ice? Good. Because when the right deal comes together – and it will – it’ll taste even sweeter.