A buyer that I am aware of made an offer on a Chaska MN home. He came to agreement with the seller and submitted a $1,000 earnest money check. After coming to agreement on inspection items and now having a binding contract his father was diagnosed with pancreatic cancer. His father died prior to closing and within a month of diagnosis. Because of the fact that Mr. buyer was going to inherit a fair sum from his father’s estate he decided to back out of the purchase agreement in order to purchase a more expensive home. At that point the seller consulted with his Real Estate agent and a Real Estate attorney.
Outlined in the Minnesota Association of Realtors approved purchase agreement is a clause that states that;
“If this purchase agreement is not cancelled or terminated as provided hereunder, Buyer or Seller may seek actual damages for breach of this Purchase Agreement or specific performance of this Purchase Agreement; and, as to specific performance, such action must be commenced within six months after such right of action arises.”
Specific performance refers to having the courts force the opposing party to complete the transaction. If the seller had backed out and the buyer still wanted to purchase the house, the buyer could have initiated action. In this case the seller wanted to move on with his life and chose to place the home back on the market. The home sold for less than what was agreed to with the first buyer so the seller sued the first buyer for actual damages and won his case.
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