Specific Performance of Residential Real Estate Contract of Sale

The COVID-19 pandemic has driven many families out of the city and into the suburbs. As a result, the residential real estate market in the suburbs is currently very competitive. It is a seller’s market, and a seller may be enticed to back out of a deal if a better one is offered. What happens when one party backs out of a real estate transaction – after the contract has already been signed? 

This situation begins when a Real Estate Contract of Sale has already been approved and signed by all parties involved. Sometimes, between the signing and the closing of the transaction, one of the parties may get cold feet. If the buyer backs out, the seller will likely walk away with the buyer’s deposit. If the seller walks away, the buyer may be forced to go to court and ask for specific performance of the contract of sale.

Specific Performance is the legal term when one party asks for the opposing party to actually follow through on their half of a deal, rather than simply asking just for monetary damages. Let’s imagine that a family is purchasing a new house from a couple. The contract has already been agreed upon and signed, but the couple decides that they don’t want to give up the house and calls off the sale. Furthermore, the couple does not want to return the deposit that the family paid.

At this point, the family could choose to take the couple to court, asking the Judge to compel the sale that was previously agreed to. The family would have to prove in court that the couple breached the parties’ contract of sale, and that the family (at the time of the scheduled closing of the home) was ready, willing, and able to move forward with the purchase.

If you have had the other side of a real estate transaction back out after a valid Contract of Sale was signed, you have the potential to compel the sale through Specific Performance. For more information, contact Canales PLLC. We frequently deal with real estate and property disputes for clients in the New York City and Long Island areas.

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Canales PLLC

As a minority-owned law firm with experience across a broad range of industries and subject matters, Canales PLLC understands the importance of creating diverse, client-centered solutions that cater to each client’s particular needs.

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