You bought from a builder and now you cant close

What Happens If You Can’t Close on a New Construction Property in Ontario?

Buying a new construction home in Ontario is exciting. But what if you can’t close on the property? Many buyers face financial issues, unexpected delays, or changing circumstances. If this happens, there can be serious consequences. Let’s look at the risks, legal issues, and possible solutions.

Common Reasons Buyers Struggle to Close

Here are some common reasons buyers have trouble closing:

• Mortgage Problems – Interest rate hikes or financial changes can impact your mortgage approval.
• Job or Income Changes – Losing a job or taking on new debt can reduce your buying power.
• Construction Delays – If the home is delayed, your financing plan might not work anymore.
• Higher Closing Costs – Extra fees like development charges and property taxes can add up.
• Market Changes – If property values drop, banks may offer a smaller mortgage.

What Happens If You Can’t Close?

If you can’t close on your home, here’s what might happen:

1. You Could Lose Your Deposit

Builders usually require a deposit of 10-20%. If you back out, they may keep it.

2. The Builder Might Sue You

Builders can take legal action if they have to sell the home for less than your purchase price.

3. You Could Face Extra Fees

You may have to pay legal fees, resale costs, and any losses the builder faces.

4. Your Credit Score Could Drop

Unpaid debts or legal action could hurt your credit, making it harder to get a loan later.

What Can You Do?

If you’re struggling to close, here are some possible solutions:

1. Look for Other Mortgage Options

• A mortgage broker might help you find another lender.
• A co-signer or private loan could help you qualify.

2. Ask for a Closing Extension

Builders may allow more time to close, but they may charge fees.

3. Sell or Assign Your Contract

Some builders allow assignment sales. This means selling your purchase agreement to another buyer before closing. Check the builder’s rules first.

4. Get Legal Advice

A real estate lawyer can explain your options and help reduce financial losses.

Final Thoughts

Not closing on a new home can be stressful. But there are ways to reduce the impact. If you see trouble ahead, act fast and speak with your real estate lawyer. Look into other financing options, talk to the builder, or consider selling your agreement. Getting professional advice early can help protect your investment.

If you need help, reach out to a mortgage broker or real estate lawyer today!