When two parties agree to make a real estate transaction, there must be a written contract involved. Both parties enter into the agreement under certain conditions and proceed toward closing the deal within a certain time period; usually 30 to 45 days between signing the contract and finalizing the transaction at closing. If one side changes their mind or otherwise pulls out of the deal, they are in breach of contract and are subject to being sued by the aggrieved party to set things right.
Why Does This Happen?
Both buyer and seller are obligated to make every effort to execute the terms of the agreement. Sometimes that proves difficult; other times, one of the parties simply withdraws from the deal. In some cases, the seller gets a better offer and attempts to drop the first agreement to pursue the new deal, or the buyer gets cold feet and decides to retract their offer to buy the property. More commonly, however, breaches of real estate contracts are due to logistical challenges. For example, the seller may be unable to offer clear title on the property or the buyer may be unable to secure a mortgage to make the purchase.
What is in the Contract?
The real estate purchase agreement should contain specific terms relating to the property, price, and timeline for the transaction. The contract should contain the following:
- Address of the property or adequate legal description
- Purchase price
- Closing date or anticipated term by which the transaction will be executed
- Date of possession transfer or move-in date
- Specific items to be included in the sale, such as fixtures or appliances
- Specific items not to be included in the sale
- Amount and terms relating to a good-faith deposit
- A promise of clear title
Contingencies in the Contract
It can be useful to include certain conditions in your contract to address the possibility of foreseeable obstacles common to executing a property purchase. Some of these hurdles include:
- Home inspection
- Buyer’s ability to sell house
- Seller finding another house
What Can the Aggrieved Party Do?
If a breach of contract occurs, the non-breaching party can get out of the contact, adjust the contract, or go through with the sale and sue for breach of contract. In addition to the deposit, they can sue for monetary damages over and above the good-faith deposit. In some cases, the non-breaching party may file to push through the sale. The Maryland standard residential contract requires mediation of all disputes before filing suit. If you cannot work out the dispute at mediation, the case may be heard in civil court.
Towson Real Estate Lawyers at Huesman, Jones & Miles, LLC Help Home Buyers and Sellers
Buying or selling a house is among the most stressful events in life. The Towson real estate lawyers at Huesman, Jones & Miles, LLC handle all aspects of real estate law. We can walk you through a conventional transaction or we can assist you with a complex suit for breach of contract. Contact us online or call us at 443-589-0150 to set up a free consultation. Located in Hunt Valley and Towson, Maryland, we serve clients throughout Baltimore, Baltimore County, Bel Air, Bentley Springs, Columbia, Freeland, Hereford, Hampton, Westminster, Essex, Monkton, Sparks Glencoe, Parkton, Phoenix, Pikesville, White Hall, Carroll County, Harford County, and Howard County.