(Source: The Toronto Star)
You won a bidding war for a home last night and paid $400,000. You receive a call the next morning from one of the losing bidders, stating that they will pay you $425,000 for the same property. Your deal is not supposed to close for two months. Can the first buyer do this and make $25,000?
This introduces the difficult subject of flipping properties, or completing an assignment of the agreement of purchase and sale. There are many questions to consider in the above example.
Can the first buyer sell their interest in the property before they actually own it?
Does the buyer need the permission of the seller?
Does land transfer tax have to be paid twice?
What happens if the second buyer does not close the deal?
Read Mark Weisleder’s answers to these queries here (YourHome.ca, August 8 2009)