When the Buyer Walked Away: A Markham Seller's Failed Closing

The situation

Iryna, an investment advisor in Markham, had agreed to sell her house for roughly $1,850,000, with closing set for a Friday in early spring. It was her first time selling a property without a spouse or co-owner involved in the decisions, and she had handled the listing and negotiations carefully, accepting an offer from a buyer named Marek, a surgeon, along with the standard 10 percent deposit of about $185,000 held in trust by the listing brokerage.

The weeks between accepting the offer and the scheduled closing had gone smoothly. The home inspection came back clean, the buyer's conditions were waived on time, and Iryna had already booked movers and given notice at her current employer's parking arrangement, treating the sale as settled. She had also gone firm on the purchase of her next home, a smaller property closer to her office, with a closing date set for the following month and no financing condition of her own, since she had planned to use the proceeds from this sale to fund it.

Three days before closing, Marek's lawyer sent a short letter: their client would not be able to close. No detailed explanation was given, only that the transaction could not proceed as scheduled. Iryna had already signed a firm agreement to buy her next home, with her own closing set for the following month, and the failed sale put that purchase at risk too. With her lender expecting the sale proceeds as part of her own financing, and movers already booked on both ends, she called our office the same afternoon the letter arrived.

The legal problem

An agreement of purchase and sale is a binding contract. When a buyer fails to close without a valid legal excuse, the seller has options, but each comes with its own risks and its own clock. Iryna could sue for specific performance (a court order forcing the sale to go through), but that remedy is slow, uncertain, and rarely practical for a residential resale once a seller has already committed to moving on. The more realistic path, and the one our team recommended, was to treat the contract as at an end, relist the property, and pursue the buyer for the financial gap between what he had agreed to pay and what the home eventually sold for.

That gap is the seller's damages. Ontario law requires a seller in this position to act reasonably to keep those damages as low as possible — a duty known as mitigation. A seller who sits on an empty house for months while carrying costs pile up, or who accepts an unreasonably low offer out of frustration, can see their own damages claim reduced by a court on the basis that some of the loss was avoidable. The deposit sitting in the brokerage's trust account complicates things further: it is not automatically the seller's money to keep. It is held pending agreement between the parties or a court order, and a buyer who disputes forfeiture can insist the funds stay frozen indefinitely unless someone applies to a court to resolve it.

The immediate practical problem was timing. Iryna's own purchase was closing in a matter of weeks, and she needed to know quickly whether she could count on any of the deposit money to help fund it, and whether relisting at a lower price to sell fast would leave her out of pocket or reasonably covered.

What we did

1. Confirmed the default was final, not a delay request. The letter from Marek's lawyer did not ask for an extension or offer any accommodation, so our team treated the agreement as terminated by his non-performance and advised Iryna accordingly, in writing, so there was a clear record of when and why the decision was made.
2. Relisted within days, at a defensible price. To satisfy the duty to mitigate, we advised Iryna's real estate agent to relist promptly at a price supported by recent comparable sales, rather than either padding it to chase the original number or dropping it to force a quick sale. Both extremes create arguments for the other side later — one suggests the seller wasn't really trying to sell, the other suggests the seller gave the loss away.
3. Tracked every carrying cost from the first missed closing date. Mortgage interest, property tax, utilities, and continued staging costs all began accumulating the day the sale should have closed. We had Iryna keep dated records and receipts for each of these from day one, since a damages claim is only as strong as the evidence behind it.
4. Sold the home and calculated the real shortfall. The property sold again about seven weeks later for roughly $1,780,000 — about $70,000 less than Marek had agreed to pay. Combined with roughly $28,000 in carrying costs and resale expenses incurred during the delay, Iryna's total loss came to about $98,000.
5. Applied for release of the deposit. Because Marek's lawyer would not consent to releasing the $185,000 deposit, our team brought an application before the Superior Court to have it paid out. We did not ask the court to award Iryna the full deposit outright — only to award her damages of about $98,000 from the funds already held in trust, with the balance of roughly $87,000 returned to Marek, since a deposit can only be kept to the extent of the seller's actual proven loss, not simply forfeited in full as a windfall.
6. Presented the paper trail, not just the numbers. The listing history, the comparable sales analysis behind the relisting price, and the dated expense records were what made the application straightforward. There was little for the other side to dispute, because every figure was documented as it happened rather than reconstructed afterward.

The outcome

The court accepted Iryna's damages calculation largely as presented. She received close to the full $98,000 she had actually lost, paid out of the deposit held in trust, and the remaining roughly $87,000 was returned to Marek. Because the application moved quickly and the numbers were well documented, the funds were released in time to support her own closing, and she did not need to delay or renegotiate her subsequent purchase.

The case worked out cleanly for Iryna not because the deposit was large enough to cover any outcome, but because she was made whole for what she actually lost, no more and no less, and could show a court exactly why. That distinction mattered: a seller who treats a deposit as automatic compensation, without proving real damages, risks a fight over the surplus that can drag on for months and cost more in legal fees than it recovers.

It also mattered for a reason Iryna had not anticipated when she first called our office in a panic over the letter from Marek's lawyer. Because the relisting was handled promptly and at a defensible price, there was never a serious argument that she had failed to mitigate her losses, which meant the application to release the deposit did not turn into a drawn-out dispute over whether her conduct after the default was reasonable. A cleaner factual record produced a faster result, and a faster result was exactly what she needed with her own purchase closing on a fixed date.

What you can learn from this