Legal Question in Real Estate Law in California

Re: What is the seller liable for with a breach of contract?

Seller - you - could be liable for the difference between the purchase price and the fair market value of the home, so if you undervalued your house by 15%, a 9% "liquidated damages" fee is not unreasonable. You should confer with a local attorney to handle the release and related matters to get you safely out of the transaction. Alternatively, the buyer could go to court and force the sale of the house, and seek damages besides, including attorney fees.

Re: What is the seller liable for with a breach of contract?

Don't think you could avoid a forced sale of the property at this point. Good old fashioned negotiating skill is your best course of action now. Good luck.

Re: What is the seller liable for with a breach of contract?

The answer to your question depends almost entirely on what the "contract of sale" you signed says. Your liability could range from refunding the buyer's deposit, to having the buyer sue you for specific performance.

You should probably have an attorney licensed in California review the documents you have signed, including the "contract of sale," and any and all escrow instructions.

Re: What is the seller liable for with a breach of contract?

The other three replies (prior to mine) pretty well sum up the buyer's legal remedies for your breach -- either specific performance (a court decree obliging you to go through with the sale) or money damages.

What is not addressed is your concerns about the ethics and morality of deliberately breaching a contract. In the business world it happens all the time. Parties determine that paying damages after a breach is preferable to performance of the contract, so they breach. Much has been written about this in legal treatises on the theory of contract law, and where the subject matter is just the nuts-and-bolts of the business world, breach-and-pay generally is economically defensible and therefore not unethical.

However, buying and selling homes is a little different from trading pig iron or number two yellow corn. Both buyers and sellers develop emotional attachments to the properties they expect to acquire, or decide not to part with. The parties are not as sophisticated nor do they have equally acceptable alternatives. Thus, breach is not quite so morally defensible, and for much the same reasons the remedy of specific performance is available whereas only money damages are available for most contract breaches.

Here, I can't see that you'd be better off breaching (and losing a specific performance lawsuit) that accepting the buyer's proposed settlement. Negotiate some more, maybe, but then settle.