Buyer Default Deals: How to Buy Condos Below Market Value When Buyers Fail to Close

By Alex J. Wilson | Broker, Owner & Real Estate Investor | RE/MAX Wealth Builders Real Estate

November 2026 | Approximately 12-minute read

You've probably seen the headlines: institutional investors and private equity firms purchasing condominiums at substantial discounts.

But what if individual investors could access similar opportunities?

What if you could buy a brand-new, never-lived-in condominium for less than comparable properties are selling for on the resale market?

And, more importantly, why would a developer agree to sell a property below its current market value?

These are the questions we explored during our November 5, 2026, Buyer Default Deals webinar.

I've been selling real estate since 2008 and investing since 2012. Today, I own an approximately $20 million real estate portfolio.

One of the most important lessons I've learned is that real estate opportunities often emerge when someone else's financial circumstances force them to make a decision they otherwise wouldn't make.

That's what makes buyer default deals worth understanding.

The opportunity isn't simply about buying something cheap. It's about understanding why the discount exists, determining whether it represents real value, and making sure the investment works over the long term.

Watch the Full Webinar: Buyer Default Deals Explained

Want to understand exactly how developers can sell completed condominiums below market value?

In this webinar, I explain why buyer default opportunities exist, how developer financing pressures can create discounts, and how investors can evaluate these properties.

We also walk through a real Calgary example and discuss how the same principles apply to Toronto condo investing.

Watch the full presentation below, or continue reading for the complete breakdown.

What Are Buyer Default Condo Deals?

A buyer default deal occurs when someone who previously agreed to purchase a condominium fails to complete the transaction.

This commonly happens with pre-construction properties.

Imagine someone purchases a condominium in 2022 for $600,000. They provide a deposit and agree to close when construction is completed several years later.

Fast-forward to 2026.

The building is complete, but the buyer's circumstances have changed.

Perhaps the buyer can no longer qualify for financing. Maybe interest rates, employment circumstances or property values have changed. Or perhaps the buyer originally intended to resell the property before closing and can no longer make that strategy work.

Whatever the reason, the purchaser fails to complete the transaction.

The developer is now left with a completed condominium that hasn't closed.

And the developer still needs to pay its lenders, contractors and operating expenses.

This is where an opportunity may emerge for a new purchaser.

Instead of holding the unit indefinitely, the builder may choose to offer it at a discounted price to generate immediate cash.

These opportunities can exist in Toronto, Calgary and other Canadian real estate markets, although their frequency and pricing depend on local conditions.

The important distinction: a buyer default deal is created by a financing or closing problem, not necessarily by a problem with the property itself.

However, every transaction still requires careful investigation.

For additional insights into buying and investing in real estate, explore our RE/MAX Wealth Builders real estate blog.

Why Would a Developer Sell a Condo Below Market Value?

To understand buyer default deals, you need to think like a developer.

Most people evaluate real estate by asking one question:

What is this property worth?

Developers must also answer another:

How much cash do I need, and when do I need it?

That difference matters enormously.

Construction financing changes the equation

Developers typically rely on construction financing to build condominium projects.

That financing is structured around construction milestones, projected sales proceeds and the eventual repayment of the loan.

When the building is completed, purchasers are expected to close on their units.

Those closing proceeds allow the developer to repay its outstanding obligations.

Now imagine a hypothetical development expecting $100 million in closing proceeds.

The developer has an $80 million construction loan that needs to be repaid.

But several purchasers fail to close, leaving the developer with a $5 million cash shortfall.

The builder may still own valuable completed condominium units, but those properties are not the same thing as cash in the bank.

Meanwhile, interest, carrying costs and financing obligations continue.

The developer has an immediate liquidity problem.

The cost of holding unsold condos

When a developer holds completed units, the costs can add up quickly.

There may be financing interest, property taxes, condo fees, insurance, utilities and other operating expenses.

Some developers may need alternative financing if their original construction financing cannot be extended on acceptable terms.

That replacement financing can be more expensive.

Consider 30 unsold units, each requiring financing and carrying costs every month.

Even if the developer believes those units are worth more than the discounted asking price, waiting six months or a year to sell them could be expensive.

Sometimes accepting a lower price today is financially more attractive than holding out for a higher price tomorrow.

The developer may be optimizing for immediate liquidity, while the investor is optimizing for long-term value.

That's the central economic relationship behind many buyer default opportunities.

What Happens to the Original Buyer Who Doesn't Close?

This is one of the most misunderstood parts of the process.

Some buyers assume that if they can't close, they simply walk away from their deposit.

That can be a very expensive misunderstanding.

A pre-construction agreement of purchase and sale is a binding contract, subject to its terms and applicable law.

When a purchaser defaults, the developer may have legal remedies, potentially including retaining the deposit and pursuing damages.

For example, consider this simplified situation:

Depending on the contract, applicable law, mitigation efforts and actual losses, the developer might seek damages associated with the failed transaction.

Additional financing and carrying costs could potentially be disputed or claimed as well.

But an important qualification: a developer is not automatically guaranteed to recover the full difference, and a buyer is not automatically liable for every expense the developer claims.

The outcome depends on the legal facts and circumstances. Some disputes end in settlements, and some result in litigation.

For an investor considering a defaulted unit, the practical lesson is straightforward.

The original buyer's failure to close may create the opportunity, but the new purchaser must understand exactly what is being acquired.

Your lawyer should confirm the purchase structure, title, relevant encumbrances, closing conditions and whether any existing disputes could affect your transaction.

For Ontario purchasers, the Condominium Authority of Ontario's guide to pre-construction condos is a useful starting point for understanding developer agreements, disclosure and buyer protections.

How to Tell Whether a Discounted Condo Is Actually a Good Deal

Not every discounted condo is a good investment.

A builder advertising $100,000 off its original price doesn't automatically mean a purchaser is acquiring $100,000 in equity.

Here's why.

Imagine a unit originally sold for $500,000.

The builder now offers it for $400,000.

That's a 20% reduction from the original price.

But what if comparable units in the same building are currently selling for $390,000?

You may be getting a substantial discount from the original builder price, but you're not necessarily buying below today's market value.

This is why I evaluate these opportunities using a simple framework.

1. Compare against current resale transactions

Find comparable properties that have actually sold recently.

Ideally, those properties should be in the same building or a highly comparable nearby development.

Adjust for square footage, floor, layout, exposure, parking, locker and finishes.

Use completed sales, not just asking prices.

If the new purchase price is meaningfully lower than defensible comparable sales, you may have a genuine pricing advantage.

Remember, even recent comparable prices can decline further. A paper discount is not guaranteed realized equity.

2. Analyze rental cash flow

Next, determine whether the property can support itself financially.

Calculate realistic monthly rent and subtract mortgage payments, property taxes, condominium fees, insurance, management, maintenance, vacancy allowances and any utilities the landlord must pay.

A property that looks attractive based on purchase price alone may produce negative cash flow when all expenses are included.

I want to understand whether I can comfortably hold the property if the market takes longer than expected to recover.

For a related example, see my analysis of Toronto condos and the mathematics of cash-flow-positive investing.

3. Investigate the developer and building

A discounted purchase can introduce additional questions.

Is the development financially stable? Are there construction deficiencies, unpaid obligations, litigation or liens? What is the status of the condominium corporation and its finances?

I would rather miss a deal than purchase a property without understanding those risks.

4. Evaluate the long-term investment case

Finally, ask whether you would still want to own the property if prices remained flat for five years.

If the only reason to purchase is the expectation of an immediate price increase, you're speculating.

If the asset can generate sustainable income, withstand reasonable stress scenarios and fit your longer-term plan, you have a stronger investment thesis.

A Real-World Example: Buyer Default Condos in Calgary

During our webinar, my colleagues Kyle and Niesh joined me to discuss a buyer default opportunity involving Mine Condos by Truman Homes in Calgary.

The project is located in Cornerstone, northeast Calgary.

According to the project details presented during the webinar, units originally marketed in 2023 and 2024 had reached completion, and a number of initial purchasers were unable to close.

This created an opportunity for the developer to remarket completed, never-lived-in units.

Kyle outlined some of the pricing being discussed at the time:

These were webinar-era examples, not a representation that the units remain available at those prices today.

What makes a situation like this interesting is the combination of a completed property, an original buyer unable to close, and a builder motivated to sell.

Purchasers can potentially avoid the long construction wait normally associated with pre-construction investing.

But the purchase price still needs to be compared with actual resale activity.

We've been studying and investing in Calgary real estate for years. You can explore more of our previous Calgary investing discussions in the RE/MAX Wealth Builders Insights library.

What does Calgary's current market tell us?

This is particularly important in Calgary, where condominium prices have been under pressure.

According to the Calgary Real Estate Board's October 2026 housing market report, the city's apartment condominium benchmark price was approximately $288,800, around 8% lower than October 2025 and 15% below its August 2024 peak.

Apartment condominiums also had more than five months of supply, reflecting continued competition and buyer choice.

This provides context, not a valuation for any individual condominium.

A citywide benchmark price cannot establish the fair market value of a specific suite in Cornerstone.

The practical question remains: How does the unit compare with similar properties that recently sold in that building or surrounding market?

That's how you separate marketing from measurable value.

Understanding the Cash Flow: A Calgary Condo Example

Let's look at another illustration from our webinar.

Kyle walked through a two-bedroom condominium and presented the following estimated monthly figures.

From that remaining amount, the investor must pay property taxes, condo fees, insurance and any other applicable ownership costs.

In the example, Kyle estimated approximately $100 per month in positive cash flow before changes in financing costs and additional unforeseen expenses.

That is a starting point, not a guaranteed result.

Vacancy, repairs, management fees, changing interest rates and unexpected assessments could reduce or eliminate positive cash flow.

Cash flow is not the same as mortgage principal repayment

Here's where many investors get confused.

Suppose a property's monthly cash flow is $100 after paying the entire mortgage payment and other operating expenses.

Part of that mortgage payment is interest, while another part reduces the outstanding loan principal.

The principal reduction increases the owner's equity, assuming the property's value does not change.

But principal repayment is not additional spendable monthly cash flow.

There are three distinct elements to understand:

Cash flow: Money remaining after paying ongoing property expenses and debt payments.

Mortgage principal repayment: Reduction of the loan balance over time.

Property appreciation: Potential increase in the market value of the property, which is uncertain.

Together, these can contribute to an investor's total return.

The webinar included an illustrative return of approximately 9%, combining assumptions about cash flow and principal repayment. That figure should not be treated as a guaranteed annual return or applied to other units without a complete, independently reviewed financial model.

Before making a decision, I recommend running conservative scenarios that account for vacancy, additional expenses, borrowing costs and possible declines in property value.

What Are the Risks of Buying a Buyer Default Condo?

Discounts exist for reasons, and a successful investor needs to understand those reasons.

Here are the major risks I would evaluate.

Market risk

The condo could decline in value after you purchase it.

Buying 15% below a defensible current comparable price may provide a margin of safety, but it doesn't eliminate downside risk.

Financing risk

Your mortgage approval, interest rate, appraisal and lender requirements can change.

A purchase that appears affordable based on an initial estimate may become difficult to close if the lender values the property below the agreed price.

Rental risk

Expected rental income is never guaranteed.

You need to understand local vacancy rates, competing rental supply, tenant demand and the building's rental restrictions.

Developer and title risk

Review the developer's financial circumstances and investigate any potential liens, title issues, outstanding construction matters or litigation that could affect the acquisition.

Liquidity risk

A condominium can take time to sell.

If you need to exit quickly, your realized sale price may be lower than your original expectations.

Concentration risk

Buying multiple units in one development may expose an investor to the same building-specific and neighbourhood-specific risks.

A lower purchase price does not automatically justify overconcentrating your portfolio.

The objective isn't to eliminate every risk. That's impossible.

The objective is to understand the risks and determine whether the potential reward is sufficient.

How Do Deposits, Cooling-Off Periods and Closing Costs Work?

Another topic covered during the webinar was the purchasing process.

For the specific Calgary opportunity discussed, the initial deposit presented was $5,000, followed by a due diligence period.

Alberta's Condominium Property Act provides cancellation rights for eligible purchases of new condominium units from developers, including a 10-day period whose start depends on the agreement and required disclosure documents.

The Government of Alberta's Purchasing a Condominium guide explains these protections and the relevant disclosure requirements.

This is a valuable protection, but purchasers should have their own lawyer confirm eligibility, deadlines and notice requirements rather than assuming every condo transaction qualifies.

During that period, I encourage prospective purchasers to arrange appropriate financing, review legal documents and confirm the economics of the property.

The team also discussed estimated closing expenses in the range of $2,500–$3,500 for the particular example.

Actual closing costs depend on the transaction and should be confirmed by your lawyer, accountant and lender. GST treatment, rebates, legal fees and mortgage-related costs can materially change the amount required.

What about new-home warranty coverage?

New-home warranty coverage also warrants specific review.

Under Alberta's New Home Buyer Protection Act, qualifying new condominiums require warranty coverage.

However, the commencement dates and coverage for individual units and common property may differ.

The Government of Alberta's new-home warranty overview explains these requirements and how purchasers can check their coverage.

Never assume the entire warranty period starts on your personal closing date.

Why I Believe in Buying and Holding Real Estate

Throughout my career, I've focused on a long-term philosophy:

Buy productive assets. Manage risk. Allow time to work in your favour.

My real estate portfolio didn't grow to approximately $20 million because I consistently predicted the next six months of market movements.

It grew through years of acquiring properties, financing them responsibly, collecting rent, managing expenses and building equity.

And when I talk about a $20 million portfolio, I'm talking about the approximate value of the properties—not $20 million in debt-free equity.

That distinction matters.

Real estate is usually a leveraged asset. Mortgages are part of the investment structure, and debt introduces both opportunity and risk.

The longer-term objective is to own assets that can generate income, build equity through principal repayment, and potentially appreciate over time.

You can learn more about my background and investment philosophy on the About Alex J. Wilson and RE/MAX Wealth Builders page.

Think in decades, not headlines

During the webinar, I shared a simple illustration.

Imagine a portfolio worth $20 million that appreciates at an average of 3% annually for 30 years.

Mathematically, its projected future value would be approximately $48.5 million before transaction costs, taxes and other adjustments.

That is a hypothetical compound-growth illustration, not a forecast of what my portfolio or any other real estate portfolio will actually achieve.

Meanwhile, mortgages could be reduced through scheduled payments, depending on the financing terms and the property's ability to generate sufficient income.

That's the long-term wealth-building mechanism I focus on.

Of course, ownership still comes with repairs, capital expenditures, vacancies, taxes and other responsibilities.

There are no guarantees.

But I believe understanding how income-producing assets work is one of the most useful financial skills an investor can develop.

Is There a Limited Window for Buyer Default Opportunities?

My view is that the current market is creating an unusual set of circumstances for certain developers and purchasers.

A large number of properties sold during a stronger pre-construction market are completing in a different financing and resale environment.

Some initial purchasers are now finding it difficult to close.

At the same time, financing costs and unsold inventory can motivate builders to seek quicker sales.

These conditions may produce discounted purchase opportunities.

I also believe the significant slowdown in new condominium development could eventually affect future housing supply.

However, future completions, demand and prices are uncertain. I would not make an investment decision based on an assumption that prices have already reached their bottom or that default opportunities will disappear by a specific year.

The proper approach is to evaluate what is available today using verifiable numbers.

Frequently Asked Questions About Buyer Default Condo Deals

Can you really buy condos below market value?

Yes, some properties are offered below prices supported by recent comparable transactions. But not every advertised discount represents an actual below-market purchase. Independent comparable-sales analysis is essential.

Do you lose your deposit if you default on a pre-construction condo?

You may lose your deposit and potentially face additional claims, depending on the agreement and applicable law. Buyers should seek legal advice before deciding not to close.

Are buyer default condos brand new?

Some are completed, never-lived-in units being resold directly by developers. Others may have different ownership or occupancy histories. Confirm the specifics for each property.

Can I get a mortgage on a buyer default condo?

Potentially, yes. Financing depends on the buyer's qualifications, the property, appraisal, lender requirements and closing timeline.

Are discounted condos good investments?

They can be, but only when the purchase price, rental economics, financing, building condition and associated risks support the decision.

Is Calgary a good place to invest in condos?

Calgary has potential opportunities, but its apartment condo market has experienced meaningful price pressure. Investors should evaluate neighbourhood fundamentals, comparable transactions, rental demand and supply conditions rather than relying on broad growth predictions.

For updated market statistics, consult the Calgary Real Estate Board's market reports.

Do I need to be an experienced investor?

No. But first-time investors should take particular care with financing, cash reserves, condominium documents, legal review and the decision to hold the property for the long term.

Final Thoughts: Opportunity Comes From Understanding the Numbers

One of the biggest mistakes I see investors make is confusing a discount with an opportunity.

They're not the same thing.

A discounted property can still be overpriced.

A cheap property can still lose money.

And an expensive-looking property can sometimes offer exceptional long-term value if the underlying economics are strong.

The difference is understanding the numbers.

Buyer default deals are interesting because they can create a mismatch between a developer's immediate need for cash and an investor's willingness to own a property over the long term.

When those circumstances align—and the fundamentals support the investment—there may be a compelling opportunity.

The goal isn't simply to buy below yesterday's price.

The goal is to buy an asset that makes financial sense today and has the potential to contribute to your wealth over the next 10, 20 or 30 years.

That's how I approach my own real estate portfolio, and it's how I encourage our clients to think about investing.

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Explore Toronto and Calgary Condo Opportunities

Interested in understanding how discounted condo opportunities could fit into your long-term investment strategy?

At RE/MAX Wealth Builders Real Estate, we help investors evaluate opportunities in Toronto, the GTA and Calgary.

Contact Alex J. Wilson to discuss your investment goals and learn more about current opportunities.

Interested in Buyer Default Condo Opportunities?

At RE/MAX Wealth Builders Real Estate, we help buyers and investors understand real estate opportunities in Toronto, Calgary and other Canadian markets.

Whether you're purchasing your first investment property or expanding an existing portfolio, the starting point is education, sound underwriting and a clear long-term plan.

You can also explore our Real Estate Wealth Builders program to learn more about our investor education, webinars and opportunities.

Contact Alex J. Wilson
Broker | Owner | Real Estate Investor
RE/MAX Wealth Builders Real Estate

Email: alex@remaxwealth.com
Phone: 416-996-5181
Website: https://www.remaxwealth.com

Maximize Your Wealth and Minimize Your Stress.

Disclaimer: This article is for educational purposes only and is based on information presented during a November 5, 2026 webinar, supplemented by publicly available information. Prices and opportunities discussed are historical examples and may no longer be available. This article is not legal, tax, mortgage or personalized investment advice. Returns and appreciation are not guaranteed. Consult qualified professionals and conduct independent due diligence before entering into a real estate transaction.