Zohal Habibi hadn’t even moved into her new home in the suburbs of Toronto when she started regretting the purchase. “We took a very bad decision,” she says.
It’s not about the house itself. She and her husband are excited about the extra space it’ll give them and their two young kids. The problem is the price they agreed to pay for the three-bedroom home in March: C$920,000 ($711,000).
Not long after, prices started to slide, and quickly. By the time their lender got around to appraising the house in May, it marked the value down to C$800,000. A second appraisal a few weeks later was even grimmer -- C$740,000.
Legally bound to the deal but no longer able to obtain a big enough loan to go through with it, the couple pleaded with the seller to nudge down the price. On Thursday, they closed at C$810,000. “We didn’t know that the market would crash,” Habibi says.
All across greater Toronto, until recently the epicenter of a national housing boom with few peers anywhere, similar tales are piling up. The specifics can vary: from someone who bought a new house before selling their old one and now can’t get as much money as they were counting on, to situations like Habibi’s, where the appraisals that determine the maximum mortgage size come in far below the agreed-to price, to simple cases of buyer’s remorse.
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