How much would it cost to default on our contract to sell our home?
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How much would it cost to default on our contract to sell our home?
We are having second thoughts on the sale of our home.
Asked on April 28, 2017 under Real Estate Law, Georgia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
First, there is a chance that--should the other side (buyer) sue you to enforce the contract--that a judge would force you to go through with the sale. This is called "specific performance," and while it is disfavored by the courts, which prefer to award "damages" (monetary compensation) instead, but it is allowed or possible--and real estate transactions are the most likely time it will be used. (That is because every parcel of real estate or every home is regarded as at least somewhat unique; no other property is likely to have exactly the same attributes. As a result, monetary compensation may be seen as inadequate.)
If the court does not order specific performance, then generally you could sued for:
1) The actual costs incurred by the other side in this transaction--e.g. mortgage application or lock in fee, appraisal fee, inspection, attorney's fees if they hired one, etc.
2) If the delay in finding a new house causes the buyers to incur additional costs (e.g. having to stay in a hotel or rent someplace to live; having to store belongings; or having to pay a higher interest mortgage, if interest rates rise, for a different home; etc.), you could have to shoulder those costs, too.
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