A GTA couple is living a nightmare.
Yixing Hu and David Lea were looking to buy home, got sucked into a bidding war, won it, had to back out, and now they have been ordered by the Ontario Supreme Court to pay the sellers $470,000 — even though they didn't end up buying the home.
Before you find out why this is the case, you need to learn their story ... As do any homebuyers.
Because you don't want to fall into this trap too.
In March of 2017, Douglas and Sheila Gamoff listed their Whitchurch-Stouffville home for $2 million. The property included a 2,800-square-foot heated 14-car garage and over an acre of land.
Just days after it hit the market, the home had three potential buyers. Hu and Lea were one set of these buyers and offered $2.05 million.
Given the multiple offers, the Gamoffs' realtor wanted the pair to come back with a higher offer.
While the judge's ruling, shared by the Toronto Sun, states Hu and Lea had no desire to get involved with a bidding war, the hot market still lured them. They won the property with a bid of $2.25 million. And so the nightmare began ...
As the judgment indicates, the couple couldn't get the financing — and the offer wasn't conditional on securing financing.
Hu and Lea wanted out. They had to go the Gamoffs' lawyer to plead their case. So the Gamoffs had to go into damage-control mode and relisted their home for $2.25 million.
Now they were the ones with a nightmare on their hands. It was May. The market had cooled. Significantly.
Two weeks went by. No offers. They lowered the price to $1,998,000.
Two more months went by. Nothing.
At the end of July, the Gamoffs dropped the price — again — to $1,798,000. The home sold within two weeks.
So the sellers wanted to recoup their losses and sued Lea and Hu for the difference from the original $2.25 million sale price.
In his ruling, Ontario Superior Court Justice Mark Edwards found the Gamoffs “are entitled to damages based on the difference between the contracted for sale price between the parties and the ultimate sale price of $1,780,000. The plaintiffs are also entitled to the special damages claimed.”
Justice Edwards also noted, “When the residential real estate market is a rising market, most people — perhaps with the exception of first-time buyers — are happy homeowners and investors.”
“When the market turns and drops, it is not for the faint of heart. The facts of this case tragically demonstrate how one family, presumably desperate for their dream home, became embroiled in a bidding war and overextended their ability to finance the purchase price of that dream home.”