When Your Condo Appraises Lower Than You Paid: A Real Buyer’s Dilemma in Vaughan

When Reality Hits: A Vaughan Condo Buyer’s Appraisal Dilemma

In 2021, a buyer purchased a pre-construction one-bedroom condo in Vaughan for $675,000 — putting down a 20% deposit with hopes of long-term growth. Fast forward to 2026, the unit is ready, the builder is handing over keys, and the buyer is ready to finalize the mortgage.

But then, the appraisal comes back at only $585,000.

That’s a $90,000 shortfall — and now the buyer must make a difficult decision.

Let’s walk through the 4 real options available when your appraisal comes in lower than expected.

Option 1: Cover the Appraisal Gap and Close

If the buyer can come up with the $90K difference, they can still move forward. The mortgage will be based on the appraised value, but they’ll own the unit.

Pros:

• No legal issues with the builder.
• No lost deposit.
• Full ownership of the property.

Cons:

• Requires significant cash upfront.
• May feel like overpaying if the market stays low short-term.

Option 2: Negotiate With the Builder for a Lower Price

Depending on the builder and market conditions, a price reduction may be possible — especially if other units are sitting unsold.

Pros:

• Reduces the out-of-pocket gap.
• Keeps the deal intact at a more reasonable price.

Cons:

• Builder may refuse.
• Negotiations can be slow or require legal help.

Option 3: Reassign the Unit to a New Buyer

If the builder allows it, the buyer can try to sell their purchase contract to another person.

Pros:

• Avoids closing on an overpriced unit.
• Might recover part of the deposit.

Cons:

• Assignment fees may apply.
• May still lose money if the new buyer offers less.

Option 4: Walk Away and Default

The riskiest choice. If the buyer can’t close and can’t assign, they may walk away — but the builder can take legal action to recover losses.

Pros:

• Ends the financial stress.

Cons:

• Loss of deposit.
• Possible legal and credit consequences.

What This Means for Today’s Buyers

This scenario isn’t rare. In markets that have cooled since the 2021 peak, pre-construction buyers are discovering that their units are worth less than they agreed to pay.

Appraisal gaps can be scary — but there are solutions. From negotiation to creative financing to assignments, the key is being proactive and seeking help early.

Final Thoughts

Real estate can shift fast. Today’s lesson from Vaughan: don’t panic, but always have a plan B.

Work with mortgage professionals, review your contract terms, and explore every path before making a final decision. The right guidance can turn a stressful appraisal into a manageable next step.

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