Breach of Real Estate Contract by Buyer
By OPLawSocialMedia on Real Estate
When a Buyer Breaches a Real Estate Contract
Hi, Real Estate Attorney, Roy Oppenheim here. I wanna talk about a little bit about what happens when a buyer does not close on a property after they’ve signed a contract. What happens if that buyer defaults? And what can the seller do, basically, under those circumstances? This is called a breach of real estate contract.
So, in this real estate frenzy that’s going on right now, we have situations where buyers default, in some cases, because the property doesn’t appraise out, although, in some cases, if you have the contingency for financing, that shouldn’t be a concern to default, but sometimes, it might be depending on the contract. But if the buyer changes their mind, they don’t get the job they thought they were gonna get, they’re getting separated or divorced, or they get sick, or they lose their job, and now, they cannot close on the property, what is a seller to do if the buyer is defaulting?
So, the first thing is, of course, the seller should always think of a real deposit. Not a little deposit, but 5% or 10% of the total purchase price. So, if in fact, that occurs, the seller will have the right to claim that security deposit, that escort deposit. And so, if that happens, that may be considered the liquidated damages that you’re entitled to under the contract and you get the deposit, you keep the deposit and you sell the property to someone else.
If that is not the case, depending on the contract, maybe, maybe, maybe, you can sue for something. Most of the contracts don’t allow for that, they usually call for only liquidated damages by the seller keeping the deposit. And so, because of that, it’s really important that when you review your contract, you make sure that it’s at your sole remedy, that you have enough of the deposit that is at stake, that if the buyer decides to change your mind, that you’ll be comfortable with keeping that deposit.
Again, if you are a seller, you should have an attorney represent you in a real estate transaction, and equally, if you’re a buyer, you should have an attorney. And we have a title company, of course, Western Title, that can assist buyers, in some cases, sellers, with their transactions, and along with that, you have a host of four attorneys who are always ready, willing, and able to represent you as time is needed.
Again, Roy Oppenheim, real estate attorney, 954-384-6114. Thank you, and feel free to call Oppenheim Law.
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