Sunday, August 2, 2009

$23,000 is a lot to pay for a house that you don't get to move into. (What's My Case Worth, 2)

Suppose you're selling a house -- as many people do -- and you accept an offer, only to have the buyer decide not to go through with it. What can you, as a seller do about it?

Most real estate offers to purchase have one of two options: Keep the "earnest money" and sell the house to someone else, or refund the earnest money and sue the buyer. If you sue the buyer, you can sue for damages -- the lost money -- or you can sue for "specific performance." "Specific performance" is an order from the Court that the buyer go through with the contract that the parties previously agreed to.

$23,000 for failing to buy a house: In the case of Summit Property Investments v. Adams, a buyer refused to close on a real estate purchase, claiming that a required roof repair hadn't been done propertly, so the seller sued for damages or specific performance. The trial court refused to order specific performance, but found for the seller, awarding $23,093.99 or so in damages to the seller (consisting of mortgage interest of $16,462.24, utilities of $1,999.91, insurance of 566.91, real estate taxes of $3,014.16, advertising of $717.42 and title insurance of $545.)

Why didn't the seller get the purchase price of the house? Because they weren't entitled to it. If a seller sues before the house is sold (as Summit Property did) they get "holding costs" -- costs they suffer while they hold the house before the verdict. If they sell after the house sells, they get either the difference between the price they got for the sale and the price the buyer promised, or the holding costs (if they managed to sell the house for more than the original offer.)

What's my case worth? provides details about previously decided or settled cases reported by the parties. Each case needs to be considered on its own merits and your own case might settle (or get an award) of more or less than these reported cases depending on a variety of factors.

Other cases:
Landlord pays up in dispute over claimed dirty apartment.