The builders of London at Heritage Station condos are suing buyers who won't or can't complete due to a drop in condo values. In one case a buyer with 5% down had financing denied by CMHC and now needs to come up with $84,000 more to close. From the Calgary Herald.
In 2007, Dany Cote put down $20,000 on a condo at London at Heritage Station. He also signed a presale contract to buy the property for $420,000.
Cote was pre-approved for the money and Canada Mortgage and Housing Corporation (CMHC) agreed to insure the loan.
But in the two-and-a-half years Cote had to wait for the condo to be built, the economy and the real estate market tumbled.
According to a recent appraisal, Cote's condo is only worth $335,000 and the CMHC will only insure a loan of up to $313,000.
"Typically, when a property is approved for CMHC insurance, CMHC does tend to honour that agreement during that period. However, there are times when an application is reassessed," says Richard Cho, a spokesperson for CMHC.
...I feel bad for this guy because there is no way he can live up to his end of the agreement while the developers are trying to extract as much money as legally possible from him regardless. But I'm mostly surprised that CMHC denied a mortgage.
On Tuesday, the builder sued Cote for breach of contract seeking both the $20,000 deposit and the difference between the presale contract price and the condo's current market value.
Super Star Agent
From The Edmonton Sun:
The Edmonton Real Estate "turnaround" happened last summer after the financial crisis and appears to have eased considerably. This report is anecdotal evidence from a super star agent and does not reflect recent market trends. Here is what the same reporter wrote in August 2007 (see previous post):
Real estate spiking upward
The “tipping point” in Edmonton real estate prices may just have arrived.
A friend in the home inspection business says multiple offers within days of listing are suddenly happening.
Re/Max’s Terry Paranych, just named the fourth-most-successful Re/Max realtor in the world at the company’s annual convention, says he’s coming off his most successful February sales in 18 years.
Even with huge slowdowns, at least half those projects will happen. The bitumen upgraders in Strathcona and Sturgeon counties are just starting. Nine proposed upgraders are listed on that website.___________________________________________________________
House prices will go nowhere but up.
on Mike(Authentic). see previous post.
We have a slew of oil stocks, purchased in March 2009 (the low of the market) that have made very little returns. We made the same in a high interest savings account without risk vs the market (to date).
March 24, 2010
I just can’t seem to “get into” the market even reading Money Road. I want to as I feel like “I’m missing out” with just collecting a very secure 0.8% bank account interest that I could be collecting 3-5% easily. Preferred shares, corp bonds, safe stuff. But it feels like the risk the market will go down again isn’t worth the rewards.
Feb 22, 2010
I’m all in 1yr GICs Cash, no RE, no gold and no stocks. Just waiting on the sidelines in a safe, very liquidable position.
March 19, 2009