Legal Question in Real Estate Law in California

Re: Residential Purchase Agreement

Check the purchase agreement for what's called a liquidated damages clause. It's normal use is to limit the buyers cost for failure to perform, but is sometimes written to include the maximum cash cost for the seller for failure to perform.

Re: Residential Purchase Agreement

You could be held liable for Specific Performance which means that you will be ordered by the Court to sell the house under the agreement, as well as potential compensatory damages to the buyer, not to mention attorney's fees and cost for having to defend your case.

Re: Residential Purchase Agreement

As you have probably learned since 6/24, breach of a valid contract to sell real estate generally gives rise to the remedy called Specific Performance.....i.e., rather than money damages which are the usual remedy for breach of contract, the seller (or buyer) can be ordered to go through with the deal.

You may have defenses to an action for specific performance (or alternative remedies such as money damages), however, such as a precondition to closing the sale which the buyer hasn't met.

If the only reason for not concluding the sale was a higher offer or the seller's plan to move into another house is delayed or falls apart, the buyer is likely to sue and, short of a negotiated settlement, to prevail.