Imagine selling your house and having the Buyer walk away from the deal without penalty. That wouldn’t happen here in Toronto but it might in New York.
In Toronto, the deal is firm when both Buyer and Seller sign acceptance of their Agreement of Purchase and Sale whether or not a deposit accompanied the deal. Should either party change their mind before closing, there are remedies at law.
In New York, acceptance by both parties is not enough to seal the deal. Until the deposit funds are delivered, there is no binding contract. A buyer who changes his mind cannot be held accountable.
The real estate market in Both Toronto and New York is very tight for buyers in the $1,500,000 to $2,000,000 price range. This is where competition is most intense. In Toronto, all bidders are potentially on the hook should they win. In New York however, the top bidder may feel he paid too much and elect to walk away leaving the Seller with no sale and an empty auction room.