Purchase-and-sale agreement is a contract

In a recent column about a seller who signed a contract to sell his home, and then changed his mind and wanted to back out of the deal, I gave a misleading answer. 

I wrongly began my answer by stating , ‘You can always back out of an agreement. The question is how much will it cost you to back out.”

This is wrong, as Jonathan A. White, an attorney in Weston, pointed out.

“Sellers who sign contracts for the sale of land, and this includes the acceptance of written offers, should never assume they can get out of their deals simply by paying damages to their prospective buyers,” White said. “They should assume just the opposite, that contracts for the sale of real estate are specifically enforceable.”

I did mention that buyers could require ‘specific performance’ in my response, but the thrust of my answer was that sellers of real estate can break their contracts. This is incorrect. 

As a seller with second thoughts or changed circumstances, you can certainly ask if your buyer would be willing to break the contract. But regardless of any amount of damages you, the seller, might be willing to pay the buyer to break the contract, the buyer does not have to accept these damages, and in fact, can require ‘specific performance’ of the contract.

As White says, “As a seller, you should not enter into a contract to sell real estate lightly, secure in the knowledge that at worst the buyer will be awarded monetary damages. 

“Under the law, monetary damages will not provide the buyer with the equivalent of the performance promised by the contract,” White said. “Courts will ordinarily specifically enforce contracts for the sale of land.” 

You’ve heard of "buyer beware." Sellers should also "beware" whenever they enter into a contract to sell real estate.

Thank you to Jonathan White for catching my misleading answer.