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Ray
Ray, Lawyer
Category: Real Estate Law
Satisfied Customers: 42185
Experience:  Texas Attorney for 30 years dealing in real estate
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What usually happens if a buyer on a real estate deal tries

Customer Question

What usually happens if a buyer on a real estate deal tries to cancel it for no valid reason?
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Florida
JA: Has any paperwork been filed?
Customer: No, this just came up last Friday after I kicked the buyers inspector out of my house for cursing me after I shared my electricians opinion on something the inspector was wrong on
JA: Anything else you want the lawyer to know before I connect you?
Customer: Thats it I guess
Submitted: 4 months ago.
Category: Real Estate Law
Expert:  Ray replied 4 months ago.

Hi and welcome to JA. Ray here to help you today.Please bear with me a few moments while I review your question, conduct and prepare your response.

Expert:  Ray replied 4 months ago.

If the buyer defaults in Florida under the sales contract, generally the seller has three alternative remedies:

  • Keep the earnest money deposit. A potential buyer who signs a real estate contract generally gives the title attorney or the real estate agent between 5 and 10 percent of the purchase price. This is referred to as the “earnest money deposit”. It is a show of good faith on the part of the buyer that they are serious in wanting to purchase the property in question. A seller would like 100 percent of the purchase price as this deposit, while a buyer would only like to sign a promissory note and shake hands with the seller.

    However, the general practice is that the buyer will put up some agreed upon percentage of the sales price as this deposit.

    In the event of a default, the seller has the right to keep this deposit, and put the house back on the market and resell it. However, the person holding this deposit is called the “escrow agent”. This agent does not have the unilateral right to release the deposit – to either buyer or seller – unless there is a written statement from both buyer and seller authorizing the release or – if the matter has to go to Court -- a court settlement agreement or a Court order.

  • Sue for specific performance: There is a legal right for the seller to file suit against the buyer, asking the Judge to order that the buyer actually go to closing. This is known as an action for specific performance. Legal actions take time and are expensive. But if the buyer is financially able – and for example if the property values has declined – this is a possible alternative for the seller to consinder.

     

  • Bring a lawsuit for damages: Let us assume that the sales contract called for a $500,000 purchase price. After the buyer defaulted, the seller was only able to sell the property for $400,000. The seller has the right to file a lawsuit against the buyer for this $100,000 loss. Damages would also include any carrying costs which the seller had to absorb until the property was in fact sold to someone else.

I appreciate the chance to help you tonight.Thanks again.

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