Typically, a buyer in real estate writes and submits a purchase offer to the seller outlining the proposed terms of purchase. When the seller accepts the terms, both parties will sign a legally binding contract of sale, which will include the finalized terms.
A seller or buyer going against the outlined terms can be considered a breach of the contract. Here are four examples of actions that may lead to this:
1. The seller refuses to sell
If a seller refuses to sell their property after signing the formal contract of sale, the buyer can go to court to require the seller to complete the sale or seek compensation for the damages they may have incurred, such as inspection costs, temporary housing expenses and legal costs.
Some contracts outline grounds in which a seller can back out of a sale and not get into trouble.
2. The buyer fails to secure financing
A buyer not securing financing when it’s one of the conditions that must be fulfilled within the agreement can be a breach. It’s recommended for buyers to have a financing contingency clause that allows them to withdraw from the deal when they can’t secure financing within the specified timeframe. Absent this clause, they risk losing their earnest money and may be in legal trouble.
3. The seller fails to make repairs
A buyer may require the seller to make certain repairs before the deal can be closed. If the seller fails to make the necessary repairs, they may have breached the contract of sale.
4. Title issues
If a seller is unable to deliver a clear title to the buyer or title issues cause a delay in closing, the buyer may take action against the seller.
A breach of the contract of sale can result in damages. If you have suffered damages in such a circumstance, legal guidance can help you determine the best way forward.