How to Lose a Deposit: Unmet Conditions Can Sink a Real Estate Deal

Podcast Episode 107:

“Conditions, Lost Deposits,
and Collapsed Deals.”

In other Tales from the Trenches I’ve talked about the importance of accomplishing sufficient diligence on any property purchase to say that you have done ‘Due Diligence.’ It’s worth repeating here because it’s so important. The notion of doing or accomplishing your own Due Diligence is what allows you to make a buying decision. Will you buy or not buy? In this Tale, a deal falls through because of a lack of diligence regarding financing conditions.

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Due Diligence Fails

Podcast Episode 95:
“A Couple on Due Diligence

I talk a lot about due diligence because it is one of the most important aspects of achieving success with real estate. This is a two-part Tale, showing a couple different examples of problems to look out for when doing one’s due diligence. The first example is about what happened when someone bought a property that was scheduled for renovation, but didn’t look into the plans. The buyer thought everything was taken care of—until things went wrong with the contractor. The second example is about someone who bought a bunch of condo units. The buyer got hit with a special assessment shortly after closing, which was a surprise because there was no deferred reserve study available. In this podcast, I draw important lessons from these examples and make suggestions about how to avoid similar problems.


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For an experienced and reliable Alberta real estate lawyer in Edmonton, contact Barry now!

House/Home Inspection” image by Mark Moz used under CC Attribution 2.0 Generic.

Removing Conditions on Purchase Contract

Podcast Episode 94:
“Removing Conditions—Should I or Shouldn’t I?

Conditions on a real estate purchase contract should only be removed once the due diligence is complete. But what if the conditions are sort of met, but not completely? Should you still remove conditions if the property seems good, the numbers appear to work, and due diligence is more-or-less done? In this Tale, our investor removed conditions even though they only had verbal assurances about rent and utilities, rather than the written tenant information that was supposed to be part of the deal. As you can probably guess, things weren’t what they were supposed to be, but the deal was already done by the time our investor figured out what was really happening! Listen to the audio to get Barry’s take on strategies for dealing with this sort of situation.

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If you’re buying or selling a home in Alberta, you need an experienced lawyer that you can trust. Get in touch with Barry now!

“3D Realty Handshake” image courtesy of Scott Maxwell. Used under Creative Commons Attribution-Sharealike 2.0.

Joint Ventures, RRSP Mortgages, Due Diligence, & More!

Podcast Episode 92:
A Few Quick Tales.”

Here’s some great stories about people buying and selling real estate in Alberta. These five quick Tales from the Trenches are short, but they show a wide range of different issues, problems, and successes.

In a joint venture, it’s always nice when a more experienced investor can help out someone who’s just getting started, which is the subject of the first Tale. The second deals with rules surrounding RRSP mortgages. Did you know that the money needs to be at arm’s length from the person whose RRSP it is? The third Tale is about Alberta Health’s Minimum Housing & Health  Standards. I’d recommend anyone looking to buy real estate in Alberta take a look at these (available HERE), especially if they want to rent out the property. The second last Tale is about seller’s warranties. They can be hard to enforce, and so due diligence with things like fire safety searches is important before committing to buy. Finally, a real estate deal that is too good to be true can have hidden problems. It might still be a good deal, but it’s best to look a gift horse in the mouth by still doing your due diligence.

Download the audio file HERE.
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If you’re buying or selling real estate in Alberta, get yourself an experienced Edmonton lawyer. Use the contact form below!

House/Home Inspection” image by Mark Moz used under CC Attribution 2.0 Generic.

Giving Keys to a Buyer & Fixed Cash Deals

Podcast Episode 91:
Keys & Cash.”

Here are two quick Tales from the Trenches: 1) tips on keeping a property buyer motivated and 2) contract language to fix the cash portion of a real estate deal.

Our first Tale shows one reason why a real estate deal can close late. Even when investors have good relationships with their buyers, I say hold onto the keys to the property until everything is finalized. That’s a “key” to motivating your buyer to hurry up!

In the second Tale, our investor had a great deal, with the seller agreeing to carry a second mortgage on the property. But when the assumption statement came back less than the first mortgage was supposed to be, our investor got caught paying the difference. You can fix the cash in a second mortgage or vendor take-back financing scenario, but this needs to be written into the contract.

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Barry McGuire is a real estate lawyer in Edmonton, Alberta. Use the form below to get in touch.

House and Keys” image by geralt on Pixabay used under CC0 1.0.

When to Remove Conditions on a Purchase Contract

Podcast Episode 90:
Diligence Pays Off.”

I’ve said it before and I’ll say it again: when you’re buying a property, never remove conditions on the purchase contract until you’ve done due diligence. A real estate lawyer like me can protect your interests and help you negotiate a better deal, but I can only work with the documents and evidence available. In this Tale, our investor was working on buying a multifamily rental property. Unfortunately, there were many discrepancies with the contents of units as well as with the estoppel certificates (aka rental confirmations forms). Good thing they didn’t remove conditions before they finished their diligence!

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Use the form below to contact Barry McGuire, real estate lawyer, Edmonton, Alberta.

Exercise That Diligence” image by Alan Levine used under CC Attribution 2.0 Generic.

What Is a Deposit?

Focus on Real Estate: Quick Tips.

In this video, Barry explains what deposits are in relation to purchase contracts, as well as why we use them. If you need a real estate lawyer in Alberta, get in touch with Barry at RMLO Law LLP.

This is the next instalment of Focus on Real Estate with Barry C. McGuire, a series of videos that provides bite-sized pieces of real estate knowledge.

Buying and/or selling real estate in Alberta? Barry can help. Contact him now!

Videos co-produced by the Real Estate Investment Network (REIN) as a Google Partner.

How to Get a Seller to Do Repairs

Podcast Episode 62:
Holdbacks or Drawbacks?”

A holdback clause can help insure that the seller takes care of a property’s deficiencies before closing. The language of this item in your purchase contract needs to be very specific in order to be effective. Some lenders, however, don’t like cash backs, holdbacks, or credits.

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