Risks of Failing to Close

Buyers Beware: The Costly Consequences of Failing to Close

Real estate transactions are significant commitments, and failing to meet your obligations can lead to serious financial repercussions. A recent legal case serves as a cautionary tale, highlighting the importance of being fully prepared before entering a binding agreement.

In this case, a buyer was unable to secure financing and breached their purchase agreement. The seller, unable to achieve the original sale price in a declining market, re-listed the property and ultimately accepted a significantly lower offer. As a result, the buyer was ordered to pay $366,513 in damages to cover the price difference, carrying costs, and additional expenses incurred by the seller.

Key Lessons for Buyers

1️⃣ Secure Financing Before Making a Commitment
One of the biggest takeaways from this case is the importance of having your financing in place before signing a purchase agreement. Real estate transactions are legally binding, and failure to close doesn’t just mean losing your deposit—it could lead to much larger financial consequences.

2️⃣ Understand the Seller’s Position
Sellers have a duty to mitigate their losses, but this doesn’t mean they have to accept unreasonable offers or take exhaustive measures. In this case, the seller acted reasonably by re-listing the property and accepting a fair offer given the market conditions. Buyers can’t rely on assumptions or speculation when disputing damages.

3️⃣ Market Conditions Matter
Whether it’s a rising or falling market, timing plays a crucial role. In a falling market, failing to close can result in significant damages as the property’s value declines. Buyers must understand how market conditions impact the financial stakes of a failed transaction.

The Importance of Professional Guidance

This case underscores the value of working with knowledgeable professionals throughout the buying process. From securing financing to navigating legal obligations, having the right team in place ensures you’re making informed decisions and protecting yourself from costly mistakes.

As your real estate agent, I’m here to guide you through every step of the process, whether you’re buying or selling. Let’s work together to ensure your real estate journey is smooth and successful.

📲 Contact me, Jenny Carlson, today to discuss your real estate goals or to learn more about navigating the buying process with confidence.

Read the full article for more details on this case and why preparation is key: [Link to the Article]