Is my contract valid?

General Real Estate Investing
1

I had a signed contract, the sellers now want to back out. Do I have any recourse?

2

Usually, real estate contracts have a “liquidated damages clause”, normally limited to the amount of the deposit. Your only other recourse would be to sue for “specific performance” where you would have to convince the judge to make them take the property as per the contractual agreement.

Keith

3

I’m the buyer, but there was no deposit.

4

You can take him to court and make him perform…in the meantime, you can also “cloud the title” and that would prevent him from transferring the property…

It depends on what you think the property is worth and/or how badly you want the property…

Keith

5

You mean can you make them sell you the house?

6

If you have a valid contract, sue for specific performance, and prevail, “YES”…

Keith

7

If there was no deposit (earnest money), then you do not have a valid contract. For a contract to be valid there must be some form of consideration.

8

Not true. For a contract to be valid, it must:

  • Identify the parties:

  • Identify the real estate (property)

  • Include signatures

  • Have a legal purpose

  • Reflect a meeting of the minds

  • Include Consideration (“consideration” may be in the form of a promise!)

(See: http://en.wikipedia.org/wiki/Real_estate_contract)

Also, see Robert Bruss’s article at:

http://tms.ecol.net/realestate/ofr_estl.htm

Keith

9

I have never done a deal without consideration beyond the “promise to pay” So this is a new to me. Thanks for the references.

10

I always put up some good faith money and require others to do the same when I’m selling, too.

Keith