Toronto-area family on the hook for $37K commission after failed home purchase
Published Thursday, September 21, 2017 11:23AM EDT
A Toronto-area family who decided to walk away from a new house they agreed to buy says they are shocked to find out they still have to pay real estate commissions, even though the deal never went through
Marcello and Anita Mastroianni decided this past spring to sell their semi-detached home in Vaughan, Ont., north of Toronto to buy a larger house for their growing family. They say their agent told them their house would fetch at least $1 million once they listed it, so they made an offer to purchase another home nearby for $1.3 million.
But within weeks of signing the paperwork, the real estate market in the Greater Toronto Area began to cool sharply and both homes dropped in value.
After reassessing their finances over the summer, the Mastroiannis decided to walk away and not close the home purchase. They knew they would lose their deposit, but they didn’t realize they would be on the hook for so much more.
They received a notice from their real estate agent, Vince Tarasca, which stated he was going to pursue them for the commissions that he lost.
The Mastroiannis were told the buyer’s representation agreement they signed states that "…the buyer agrees to pay such a commission…even if a transaction…is not completed, if such non-completion is (due) to the buyer's default or neglect."
The commission their agent says they owe? $36,753.
In a statement to CTV News, Tarasca explained that many hours and days were devoted to the family and that agents involved did their jobs correctly, “with integrity and honesty.”
He said of the Mastroiannis: "...they refused to close, stringing sellers, agents, mortgage brokers and lawyers along the way… This is a case of a client taking advantage of the current situation of the housing market due to buyer's remorse."
The Mastroiannis say if they could have closed the deal, they would have.
"We didn't end up in the house, we lost a large deposit. So how do you go about thinking you are allowed your commission? The deal never went through," Anita Mastroianni said.
The matter will be settled in court. The agent says any money recovered will be donated to charity.
With a report from CTV Toronto’s Pat Foran