Problems Buying a House in Ontario? 7 Things That Can Go Wrong

by Ana Bastas

What Can Go Wrong When Buying a House in Ontario?

The most common complications in an Ontario home purchase include inspection problems, financing difficulties, low appraisals, title issues, seller non-cooperation, missed deadlines and buyers wanting to cancel after signing.

Finding the right home is exciting. But getting an accepted offer is only one stage of the transaction.

Between the accepted offer and closing day, unexpected issues can arise that affect your finances, your moving plans and your legal obligations.

Imagine purchasing a home in Oakville, Burlington, Milton or Georgetown.

You've negotiated the purchase price, submitted your deposit and started planning your move.

Then something unexpected happens.

The inspection reveals a costly foundation issue.

Your lender questions the property's appraised value.

The seller refuses to complete an agreed repair.

Or you begin wondering whether you made the right decision.

What happens next depends largely on the agreement you signed, the conditions it contains and whether the transaction is already firm.

Understanding those details before problems arise can help protect your interests.

1. The Home Inspection Reveals a Serious Problem

A home inspection may uncover issues that were not apparent during a showing.

Examples include:

Foundation movement or structural concerns.
Water penetration or basement moisture.
Roofing deterioration.
Electrical deficiencies.
Plumbing problems.
Heating and cooling system failures.
Evidence of mould or previous water damage.

If your agreement contains an applicable inspection condition, you may have options under its wording.

Depending on the circumstances, those options may include requesting further investigations, negotiating repairs or a price adjustment, or properly terminating the agreement.

If the agreement is already firm, your rights may be more limited.

An unexpected inspection result does not automatically give every buyer the right to cancel.

2. The Property Appraises Below the Purchase Price

Suppose you agree to purchase a home for $1,000,000.

Your lender obtains an appraisal indicating a value of $950,000.

The lender may calculate the mortgage using its accepted property value rather than the agreed purchase price.

This can create a financing shortfall.

The buyer may need to provide additional funds, seek different financing or explore a negotiated solution.

Whether the buyer can terminate the transaction depends on the agreement and any applicable financing condition.

3. The Seller Refuses to Complete Agreed Work

Imagine your Agreement of Purchase and Sale requires the seller to repair a specific issue before closing.

As closing approaches, the repair has not been completed.

What happens?

The answer depends on the precise contractual obligation, whether the seller has breached it and the remedies available.

Possible solutions may involve negotiating completion of the work, an agreed adjustment or another arrangement documented by the parties' lawyers.

Buyers should not assume they can automatically delay closing, deduct money or terminate the agreement.

4. A Title or Legal Issue Appears Before Closing

Your lawyer's review may uncover a problem involving ownership, registered interests, access or another title matter.

Some issues can be resolved before closing.

Others may require additional investigation, negotiations or legal remedies.

The agreement's title provisions, requisition requirements and closing obligations can be critical.

This is why your real estate lawyer plays such an important role in the transaction.

5. The Buyer Changes Their Mind

Buyer's remorse is more common than many people realize.

A buyer may begin questioning the purchase price, location, property condition or financial commitment.

However, Ontario generally does not provide a universal cooling-off period for ordinary resale home purchases.

If the agreement is firm, changing your mind usually does not create an automatic right to cancel.

Walking away without a valid legal justification can put your deposit and additional money at risk.

6. The Seller Refuses to Close

A seller may have second thoughts, experience difficulty completing a related purchase or become unable to fulfill their obligations.

But an accepted, binding agreement creates obligations for both parties.

If the seller fails to complete the transaction without legal justification, the buyer may have legal remedies.

Those remedies depend on the agreement and circumstances and may include damages or, in appropriate cases, a claim for specific performance.

7. The Transaction Falls Apart and the Deposit Remains Tied Up

When a deal collapses, buyers sometimes assume their deposit will immediately be returned.

That is not necessarily the case.

If the buyer and seller disagree about who is entitled to the deposit, the funds may remain in trust while the dispute is resolved.

This can complicate the buyer's ability to purchase another property.

What Should You Do When a Home Purchase Becomes Complicated?

The most important step is to identify the problem before making a decision that could affect your contractual rights.

Review the agreement, document the issue and obtain timely advice from the appropriate professional.

A home inspector can explain a property defect.

A mortgage professional can assess financing options.

A real estate lawyer can advise on contractual rights and remedies.

An experienced REALTOR® can help coordinate the real estate aspects of the transaction, assess market considerations and negotiate potential solutions.

Frequently Asked Questions About Ontario Home Purchase Problems

Can I cancel a house purchase after my offer is accepted in Ontario?

Possibly, but not simply because you've changed your mind. Your rights depend on whether the agreement is conditional, firm or otherwise subject to a valid legal basis for termination.

What happens if a home inspection reveals major problems?

If an applicable inspection condition remains in effect, you may have options under the agreement. If the deal is firm, the situation requires a more detailed contractual and legal assessment.

What happens if the seller refuses to close?

A seller who breaches a binding agreement may face legal consequences. The buyer should obtain advice from an Ontario real estate lawyer before taking action.

Can a mortgage lender change its decision before closing?

Yes. Mortgage financing may depend on final underwriting, property appraisal and satisfaction of lender conditions.

Can I lose my deposit if the purchase falls through?

Yes, depending on the reason the transaction fails and the agreement's terms. A buyer who defaults on a firm agreement may risk forfeiting the deposit and potentially owing additional damages.

Who should I contact first when something goes wrong?

Contact your real estate representative and lawyer promptly. If the problem involves financing or property condition, the appropriate mortgage or inspection professional may also need to be involved.

Ana's Perspective: The Details Matter

Since 2012, I've helped buyers and sellers navigate important real estate decisions throughout Halton, the Greater Toronto Area, Hamilton and Niagara.

My approach has always been about more than finding the right property or negotiating a purchase price.

It's about understanding the details, anticipating potential challenges and helping clients make informed decisions before those challenges become costly.

The right home matters. So does the right strategy for getting to closing.

Buying or Selling in Ontario?

Whether you're buying in Oakville, Burlington, Milton, Georgetown, Hamilton or Niagara, the Ana Bastas Real Estate Team provides personalized guidance, market expertise and strategic negotiation support.

Experience the Ana Bastas Advantage™

Ana Bastas, ABR®, SRS®, SRES®, RENE®
Founder & Team Leader | Listing Specialist
Ana Bastas Real Estate Team
Real Broker Ontario Ltd., Brokerage

Phone: (289) 670-5888
Email: ana@anabastas.ca
Website: www.anabastas.ca

Continue Reading

Home Inspection Reveals Major Problems in Ontario: Can You Walk Away?
Seller Won't Cooperate Before Closing in Ontario: What Are Your Rights?
Buyer's Remorse After Signing an Offer in Ontario: Can You Back Out?
Real Estate Deal Falls Through in Ontario: What Happens Next?

Disclaimer: This article provides general Ontario real estate information and is not legal, mortgage or financial advice. Contractual rights and remedies depend on the specific agreement and circumstances. Consult a qualified Ontario real estate lawyer regarding legal concerns.