RESOURCES

The residential real estate market has always gone through various cycles that are affected by numerous factors. It is amazing though that the old axiom “what goes around, comes around” always seems to be true.

Through the recently ended and prolonged period of a residential market characterized by a relatively low supply coupled with low interest rates there were very few Agreements of Purchase and Sale (APS) that contained negotiated conditions in favour of Buyers. The market of multi-offered bids demanded that the APS was basically limited to descriptions of the parties and the property, and thus limiting any negotiations to the purchase price, the deposit, and the completion date. Conditions for financing and inspection would not be considered let alone accepted. Even conditions for Status Certificate reviews for re-sale condominiums were not acceptable which forced lawyers to do rushed reviews prior to the submission of an unconditional APS.

Times have now changed. The market has changed again as it inevitably does. Multi-offer bids are rare and certainly not expected. Accordingly, real estate agents now must discover or re-discover the art of negotiating conditions to get properties under contract. Newer agents that have only been working during the multi-offer bid market are discovering the hard way that they now must adjust and learn a whole new level of negotiating to get a deal done. More seasoned agents are drawing on their past experience in order to engage in the back-and-forth negotiations required.

These days it is not advisable to summarily dismiss any offer as there might not be another offer for a considerable amount of time. Reasonable conditions for reasonable periods of time makes a lot of sense in today’s market. We have even seen the comeback of the condition upon the Buyer selling the Buyer’s current property.

We have been helping many agents through this adjustment process with strategies and drafting, and we expect to continue to do so for the foreseeable future. Please do not hesitate to reach out to us for assistance.

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David H. Korman is the Managing Partner at Kormans LLP. His practice areas include residential and commercial real estate transactions, commercial leasing and private and institutional lending. You can reach David at dkorman@kormans.ca. The information and comments herein are for the general information of the reader and are not intended as advice or opinion to be relied upon in relation to any particular circumstances. For particular application of the law to specific situations, the reader should seek professional advice. Kormans LLP cannot be responsible for the content of other sites. We expressly disclaim all liability with respect to actions taken or actions not taken based on content received from a third party website linked, directly or indirectly, to that of Kormans LLP.  The link to another site is not to be construed in any way as an endorsement of the host, the site or the information contained therein, nor is such link to be inferred as an association or affiliation with the host.