Many things can go wrong during a real estate closing. For example, the buyers might not have certified funds to cover all of the costs for the closing. Issues may arise at the last minute that push back the closing or force renegotiations in some cases.
However, buyers who have submitted an offer and negotiated a purchase agreement with a seller should fulfill their promise to acquire the property. In some cases, buyers cancel the closing with little advance warning, leaving sellers in a very challenging situation.
Real estate litigation may be necessary after buyers inappropriately cancel a real estate transaction.
Sellers could recoup some losses
People seeking to purchase real estate generally deposit earnest money with their agents or with the agent of the seller when they make their offers. Earnest money is usually at least 1% of the offered price for the property. It represents the buyer’s good-faith offer and intent to complete the transaction.
If they fail to do so, then the seller may potentially have grounds to retain the earnest money as compensation for the inconvenience they experience. Buyers typically do not want to lose thousands of dollars that may represent a significant portion of their down payment for the property.
They may fight to keep as much of their earnest money as possible. Sellers may need to litigate to enforce their right to retain those funds by establishing that the contract did not have appropriate contingencies or that the circumstances did not actually trigger the contingencies included by the buyer.
Having appropriate assistance when preparing for real estate litigation can help people understand their rights and minimize the chances of potentially costly mistakes. Sellers who want to retain earnest money after a failed transaction may need help proving that they have a right to those funds.