The buyer should consult all other offers. If it is the only one to offer with 1.3, there is something fish, but if everyone offers in the same Neibourhood, that is probably what is fair value, and the bank will probably approve it. The law already protects the buyer, the problem is that it is currently a seller`s market. In principle, if the cost of credit remains low, people will continue to borrow. Section 25 of the Code of Ethics contains provisions for commission agreements between a broker and a seller, as well as offers or proposals to amend them. If the brokerage office representing the seller and seller accepts commission terms that may affect whether or not to accept an offer, then the brokerage office representing the seller must disclose the details of these terms to anyone who makes a written offer to purchase. In a commission reduction agreement, the listing brokerage agreed with the seller to reduce the previously agreed commission. Below are the two most common ways to do this. Was the seller well represented? The seller took a huge risk by undervaluing his assets by that much, and although it seems that they received much more than they thought, there are still enormous risks. The winning buyer still needs financing (probably depending on a bank that values the home at $1,366). And of course, the seller must hope that the buyer will not return from the sale by reading in the Toronto Star what his agent (the same person as the seller) actually thought the house was worth $1.1. Were the buyers who did not win treated well? Buyers spent time looking at the property, paid for certified deposit checks and many probably spent money ($400-700) on a home visit.
Many of them probably received bad advice from their agents and thought they could actually get this house with their $800K subs offer. And what buyers probably don`t know is that they unknowingly participated in a game that will drive up prices in the neighborhood, so they probably can`t afford to live there anymore. They were tricked into playing a game they had no hope of winning and were used as peasants to drive up the prize. The depreciation of collateral is the main risk associated with guaranteeing loans with tradable assets. Financial institutions closely monitor the market value of all financial assets held as collateral and take appropriate action when the value is then below the maximum credit/value ratio.