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Answers (11)
Generally, the contractual clause concerning the earnest money deposit designates that those funds will become liquidated damages upon a buyer's breach. "Liquidated damages" is an amount of compensation that the parties contractually agree will act to compensate an injured party should the other party breach the agreement (here the seller). This simplifies the process by removing the requirement that the seller prove specific damages associated with having to relist the property, find another buyer, etc.
Tim Haag,
"Specific performance" is a legal remedy reserved for cases when pure monetary damages will not make the injured party whole. Clearly, a seller can be made whole by an award of monetary damages for the difference between the defendant buyer's contract and the price the seller ultimately received for the property from a second buyer. In real estate, "specific performance" generally comes into play when a seller breaches a sales contract and the buyer wants that particular house, which arguably can't be replaced with another or compensated monetarily.
"Specific performance" is a legal remedy reserved for cases when pure monetary damages will not make the injured party whole. Clearly, a seller can be made whole by an award of monetary damages for the difference between the defendant buyer's contract and the price the seller ultimately received for the property from a second buyer. In real estate, "specific performance" generally comes into play when a seller breaches a sales contract and the buyer wants that particular house, which arguably can't be replaced with another or compensated monetarily.
Find a little spot of mold, krinkle up your nose and walk away.
- weebear
- Contributions:48
Doesn't seem anyone of these experts have told you about certain loop holes that can void the first home you have a contract with. You can use the home inspection as a way to get out of that contract and have another offer on another home. If you have a really good realestate person who has alot of experience and knows the laws and who is also very clever, she or he will find you a way out of that contract. Is there anything wrong that you can find a reason not to buy the house with the inspection?
- Michael Emery, "MikeEmery"
- Contributions:7283
This question has been asked a couple of times in the last several months, and at least one agent in California said it was 'ok' to submit upwards of five offers on five different properties.
I was horrified at such grossly inaccurate advice as was the attorney for the company that holds my license.
i am extremely pleased that we have all at least grasped the ramifications of multiple offers on multiple properties even if the legal outcome may different from state to state.
Short answer; just don't do it!
I was horrified at such grossly inaccurate advice as was the attorney for the company that holds my license.
i am extremely pleased that we have all at least grasped the ramifications of multiple offers on multiple properties even if the legal outcome may different from state to state.
Short answer; just don't do it!
- Tim Haag, "Tim Haag 1"
- Contributions:52
Roberto Ribas...I believe it would be advisable for you to qualify your opinion by indicating what State your opinion applies to. It is a disservice to offer a generic opinion.
Unless you are knowledgable about contract law and practices in States other than your own, you should use discretion when offering your advice...Tim
Unless you are knowledgable about contract law and practices in States other than your own, you should use discretion when offering your advice...Tim
specific performance is not a possible lawsuit against the buyer, but rather a suit for damages is possible. Depending on your contract and state law, the earnest money may be used as liquidated damages.
- Tim Haag, "Tim Haag 1"
- Contributions:52
butterfly 1969...be afraid!
In NC, here's how it works. Say you have a valid contract on one home. You make an offer on a second home. The seller accepts the offer with no changes and signs seals and delivers it back to you. You have just bought 2 homes.
You risk much more than losing your earnest money deposit. The seller in either contract can sue you for "specific performance"...i.e., to force you to fulfill your obligations under the contract.
Before you "shop contracts", please CONSULT YOUR ATTORNEY.
In NC, here's how it works. Say you have a valid contract on one home. You make an offer on a second home. The seller accepts the offer with no changes and signs seals and delivers it back to you. You have just bought 2 homes.
You risk much more than losing your earnest money deposit. The seller in either contract can sue you for "specific performance"...i.e., to force you to fulfill your obligations under the contract.
Before you "shop contracts", please CONSULT YOUR ATTORNEY.
- Linda Strasberg, "L Strasberg"
- Contributions:2314
You're under contract to buy one property. You want to buy another property as well, yes? Will you be financing both of them? Will you qualify for both?
- Michael Dunn, "MichaelSDunn"
- Contributions:469
Yes, if you are prepared to buy both properties. However, if you meant that you do not wish to complete the sale on the first home, and would rather purchase the second...then it depends. In Colorado, the commision approved contract is somewhat buyer friendly in that it alows for a number of opportunities during the due deligence period for a buyer to evaluate the property and if it is found to be un-satisfactory, allows for a buyer to terminate the contract without loosing his/her earnest money. This due deligence period is for a specific period of time, so once the final deadline has past, you are commited and if you do not proceed with the closing of the transaction, your earnest money may be kept by the seller.
So, at least in Colorado, if you have not past your final deadline, you could terminate the first contract and proceed with the purchase of the second.
On an ehtical note, most people assume that when a contract is signed, barring any un-forseen circumstances or problems with the property, that the parties will proceed in good faith and fulfill their obligations as laid out in the contract. Simply put, I would recomend that you deal fairly and openly with the other party of the first contract and try to work something out, before getting involved in another contract.
-Mike
So, at least in Colorado, if you have not past your final deadline, you could terminate the first contract and proceed with the purchase of the second.
On an ehtical note, most people assume that when a contract is signed, barring any un-forseen circumstances or problems with the property, that the parties will proceed in good faith and fulfill their obligations as laid out in the contract. Simply put, I would recomend that you deal fairly and openly with the other party of the first contract and try to work something out, before getting involved in another contract.
-Mike
Sure you can - however you must be fully aware that you will run the risk of losing your good faith monies deposited so far. There are other factors but that's the bottom line. You have to ask yourself, is the offer you want to make on the other home something you feel with come to agreement on? How much money is at stake here and is it worth it to me? Depending on why you changed your mind - it may or may not be worth it to you. Ask your agent (assuming you're using one) - how far along you are in the process and how will this impact you as a buyer.
Also - if you have a to sell too - this could create a ladder of issues/concerns.
Good luck.
Also - if you have a to sell too - this could create a ladder of issues/concerns.
Good luck.
Can I offer on another home if I am allready under a contract to buy.
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