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Litigation and a lost deposit | REM

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My clients were selling their house and had received an offer. Right away, I knew something was fishy.

The offer itself was fine. It had the typical conditions that most offers have, including the condition that they would buy if financing went through. What was unusual was how quiet they and their agent went in the days that followed. Normally, the buyer and their agent are eager to satisfy offer conditions as soon as possible.




We didn’t hear from them for days, so I phoned the agent. “How’s the financing coming?”

“They’re working on it,” the agent said.

So, we waited some more, but after all these decades in the industry, my spidey senses were tingling…telling me something wasn’t right.

Finally, the night before the offer was set to expire, the agent called and asked for an extension on the financing. At that point, I required more information. Without that, I wasn’t going to subject my clients to this risk. That’s when I found out the whole story.

The buyers were new to Canada, having immigrated to Winnipeg to start their new life studying in university. Their family had offered them a sizable amount of money to start their new life here and the couple had planned to use it as a down payment on their house.

That night, after their offer was accepted, they called overseas and excitedly announced to their family, “Guess what! We bought a house!”

The family was not happy… “What? We’re not giving you the money for that! You were supposed to use it to get established in your new country, not buy a house.”

Suddenly their down payment was gone and they were scrambling to secure additional financing for their house.

My clients in good faith granted the extension for three days, but the same thing happened again. The night before the offer was set to expire, we got another story of how the financing wasn’t working out. This time they were changing lenders and wanted another extension.

The worst part was that they were not telling their agent or my clients any of this and they intended to tie up the for-sale house for another few days.

Here’s the big problem with all of this – while an offer is pending on a house, it affects the sellers, losing valuable exposure of their home for a financially qualified buyer. These buyers, as was discovered, were not qualified and somehow their agent was in the dark on it – why, I can only surmise.

When I represent my clients as buyers, I always obtain a pre-approval letter from their lender before they set out to see, let alone make an offer, on a home. The letter is critical as it outlines the amount of mortgage they can obtain, the amount of down payment and closing cost monies required, the terms and any conditions of the approval. That way we know up-front any potential hurdles to clear ahead of time.

If the offer goes through, it’s fine. But what if the offer falls through?  The seller loses.

I suspected the couple was either knowingly or perhaps unknowingly acting in bad faith and the sellers’ lawyer suspected possible fraud due to misrepresentation.  Had they been up-front about their challenges, my sellers could have rejected the offer and moved on to others or their agent could provide guidance as to how to put it together for them. That is what we as real estate professionals do! They should have put their ducks in a row before offering, not making their problem my sellers’ problem. It’s just bad faith.

What happened next was that the seller refused to release the deposit, so my office held it in our trust account for two years sitting on our books (an accounting nightmare) while their respective lawyers could deal with it.

This is the cost of not having ducks in a row. The buyers were at risk of losing thousands of dollars and perhaps being sued for even more.

If you’re the agent, clear communication and understanding of your client’s situation is on you. You have duties of honesty and fairness to everyone involved.

If you’re the person buying (or selling) be honest. Be transparent.  This is legally binding stuff, people – there cannot be any misrepresentation.

If you’re relying on some external source to fund your down payment (even if that external source is your own mutual fund or RRSP), don’t rely on it until it’s in hand.

Are all your client’s ducks in a row? Download my Preapproval Checklist to find out.

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Couple from Toronto buys dream home in Mushaboom

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MUSHABOOM – A couple who lived and raised a family in downtown Toronto developed a five-year plan in 2015 to purchase their dream home.

In September they moved into the home – located on Malagash Island in Mushaboom on Nova Scotia’s stunning Eastern Shore – that met and exceeded their best dreams for their retirement.

The Camerons, Bruce and Tanya, decided in 2019 they would explore the Maritimes to see what real estate was available to become their potential retirement home. In the spring of 2020, during a global pandemic, the real estate boom hit their city, and they were hearing the same for Nova Scotia. Our province was their first-choice for attaining their desire for an entirely different lifestyle – away from the busyness of the city.

“We had $300,000 to $350,000 as a home value in mind to buy. Our semi-detached located off Danforth in Toronto was priced at $850,000. We wanted to come out ahead, so we would be secure in retirement,” Tanya said.

Their century-old home had prime location near the subway and GO Transit Line for a great 13-minute commute downtown.

“We enjoyed our community,” explains Bruce “… we had great neighbours, young children around and street parties – lots of social activity.”

Bruce says, “Our agent suggested a starting quote of $899,000. We did not do any renovations and only some staging. Fifty couples went through and we received four significant offers. Six days later we sold – with zero conditions – and a price of over a million dollars. We just requested a closing of September 2020 to get the kids off to school – which we got.”

The couple got more than they had anticipated.

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Rabobank Announces Leadership Changes in U.S., Canadian Offices

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NEW YORK, Dec. 16, 2020 /PRNewswire/ — Rabobank, the leading global food and agribusiness bank, has appointed two of its top executives, Tamira Treffers-Herrera and Robert Sinescu, to become Co-Heads of North American Client Coverage, positioning the Bank for future growth in the region.

Treffers-Herrera has also assumed the role of Vice Chairperson and Head of the Atlanta office, where she additionally oversees Rabobank Mexico, which is led by Eduardo Palacios. Sinescu is the Head of the Chicago office, and also oversees Rabobank Canada, led by Marc Drouin, who was recently appointed as Canada’s General Manager.

Treffers-Herrera and Sinescu report to David Bassett, Head of Wholesale Banking North America, the Bank’s corporate and investment banking business for the region based in New York.

“Both Tamira and Robert have a demonstrated history of strong leadership, operational excellence and passion for our clients,” Bassett said. “Their broad experience and deep sector expertise will be invaluable in delivering dynamic results for clients while accelerating our growth trajectory in North America.”

Each office will have an even greater focus on key Food & Agribusiness sectors and clients: The Chicago office will drive growth in sectors including Dairy, Farm Inputs and Grains & Oilseeds, which are also key areas of focus for the Canada office. The Atlanta office will focus heavily on sectors such as Animal Protein, Beverages, Sugar, and Supply Chains, which are important sectors in Mexico as well.

“Rabobank is fully committed to our clients throughout North America, and we believe our new sector-focused coverage will improve our ability to provide knowledge-based, value-added solutions that benefit our clients,” Bassett said.

Treffers-Herrera was most recently based in London as CEO of Rabobank’s European Region from 2016-2020, where she took the organization through Brexit. Prior to that, she worked in the Atlanta office from 2002-2016. During her tenure in Atlanta, Treffers-Herrera served as Global Sector Head – Consumer Food & Beverages, and prior to that she was a senior banker for a portfolio of large beverage and consumer foods clients. She holds a Bachelor of Arts degree from the University of Kentucky, a Master of Arts from the Patterson School of Diplomacy and International Commerce and has studied at The University of Chicago Booth School of Business and Harvard Business School.

Sinescu has been with Rabobank for over 21 years and was previously General Manager of Rabobank Canada, where he oversaw all operations, business development, commercial strategy and relationships with regulators. In addition, he continues to serve as CEO of Rabo Securities Canada Inc. Prior to Canada, he was a senior banker, Head of Corporate Banking, European Sector Head for Sugar, and a member of the Management Team for Rabobank France. He holds a Bachelor of Science in Business from the Bucharest School of Business, a Master of Business Administration & Management and a Master of Science in Banking and Corporate Finance from Sorbonne University in Paris, and has studied at Brown University.

Drouin has worked with Rabobank’s Canadian team for more than nine years and most recently served as a senior banker, Head of Rabobank Canada’s AgVendor Program and a member of Rabobank Canada’s Management Team. He brings extensive wholesale banking experience within the Dairy, G&O, CPG and Supply Chain sectors. Drouin holds a Bachelor of Arts degree from McGill University and a Master of Business Administration in International Finance, Marketing and Management from the Schulich School of Business at York University.

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Greybrook Realty Partners & Marlin Spring Brand Jointly Owned Asset Manager – Greyspring Apartments

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TORONTO, Dec. 14, 2020 (GLOBE NEWSWIRE) — Greybrook Realty Partners and Marlin Spring are pleased to announce the new branding of their jointly owned investment and asset management firm, Greyspring Apartments. With a portfolio of more than 2,000 units and CAD$375 million in assets under management, Greyspring Apartments is focused on the acquisition and repositioning of multi-family assets throughout Canada.

The new name and branding is an important step in Greyspring’s evolution as an independent operating business. Formed in 2018 by long standing-partners Marlin Spring and Greybrook Realty Partners, Greyspring Apartments was established with the goal of building a leading asset management firm with a robust portfolio of residential rental real estate assets in primary and secondary markets across Canada.

Greyspring’s talented team of real estate, asset management and finance professionals is overseen and guided by the Management Board, whose members include Benjamin Bakst, CEO, Marlin Spring; Elliot Kazarnovksy, CFO, Marlin Spring; Sasha Cucuz, CEO, Greybrook Securities Inc.; Peter Politis, CEO, Greybrook Realty Partners; Chris Salapoutis, President & COO, Greybrook Realty Partners; Ashi Mathur, President, Marlin Spring; and Karl Brady. In addition to his role on the Management Board, Karl Brady leads Greyspring Apartments as its President. 

“We are pleased to announce the official name and branding of a business we formed with our partners at Marlin Spring a few years ago,” said Peter Politis, CEO, Greybrook Realty Partners. “Greyspring has been diligently focused on the execution of strategic value-add programs across its portfolio that are improving the quality of housing for tenants and overall asset values. For Greybrook investors, expanding from our core business in real estate development to the value-add space through Greyspring, has allowed us to provide our clients with investment opportunities that diversify their real estate investment portfolios.”

“Marlin Spring and Greybrook have partnered on many residential real estate projects in recent years,” said Benjamin Bakst, CEO and Cofounder, Marlin Spring. “To a great extent, Greyspring illustrates our approach to partnerships. We believe in, and strive for, responsible growth through deepening our relationships with our trusted partners. With Greyspring, we’ve formalized our focus on providing better and more affordable living experiences for Canadians. This vision aligns with our mission to deliver exceptional real estate value to all our stakeholders with an uncompromising adherence to our core values.”

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