35% Down And STILL Got CRUSHED!
Why It Matters
The scenario illustrates how foreign‑buyer regulations and tax liabilities can derail real‑estate transactions, prompting developers and investors to adopt stricter due‑diligence and financing safeguards.
Key Takeaways
- •Foreign buyer placed 35% down payment on Canadian property.
- •Builder refuses mutual release, demanding full shortfall payment.
- •Non‑resident buyer tax adds significant cost to transaction.
- •Assignment must occur promptly; buyer needs trusted third‑party funder.
- •Liquidity constraints hinder closing, forcing negotiation with developer.
Summary
The video discusses a foreign, non‑resident buyer who put down a 35% deposit on a South Forest Hill property in Canada and now faces a shortfall that exceeds her initial payment. The developer refuses to issue a mutual release and return the deposit, insisting the buyer cover the remaining balance.
Key complications include the non‑resident buyer tax, which inflates the overall cost, and the inability to close the deal in the buyer’s name due to her foreign status. The buyer seeks to assign the contract to a third party who can provide the necessary funds, but the assignment must be timed correctly and requires a high level of trust.
The builder’s stance is summed up in the quoted refusal: “We’re not giving you a mutual release and taking your deposit; we want whatever the shortfall is.” The buyer’s request to use another party’s money highlights the liquidity challenges and the need for a reliable partner to complete the transaction.
For investors and developers, this case underscores the heightened risk and complexity of cross‑border real‑estate deals, emphasizing the importance of thorough tax planning, clear assignment provisions, and contingency financing to avoid costly stalemates.
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