Buyer breaking contingent real estate contract in Missouri

UPDATED: Oct 2, 2022

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Buyer breaking contingent real estate contract in Missouri

My fianc has a contract to buy a home contingent on the sale of her existing home. The home is close to what she wanted, but she would have to do some kitchen remodeling to get exactly what she wants. She has since found another home that is exactly what she wants for less money. Is she bound by law to buy the first home, if her existing home sells before the contingent contract expires? She knows she will lose her deposit. But can she be sued for breaking the contract?

Asked on August 27, 2019 under Real Estate Law, Missouri


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) Yes, if the contingency is fulfilled (her home sells), then she'd have to go through with the contract and buy the house; if she does not, she will be in breach of contract.
2) If she breaches the contract, she definitely loses the deposit. As for whether she could be sued for more than that:
a) She should check the contract--many contracts limited the seller's recovery for breach to the deposit, and if this contract does, that limitation is legal and enforceable; the seller would not be able to do more than keep the deposit.
b) If the contract does not limit the seller to keeping the deposit, then IF the seller can show he/she experienced losses exceeding the deposit, he/she could sue for the surplus. Example:
Say the deposit is $10,000. Say the seller is purchasing or renting a new place, so if this house doesn't sell on time, he or she will be paying for two places simultaneously. Say that the monthly "run rate" on this home is $3,000: that is, the sum of monthly mortgage, taxes, insurance, utilities, etc. is $3,000 per month. Say that it takes the seller an extra 6 months to sell after the breach. The seller would have incurred $18,000 in costs but only had a $10,000 deposit to offset them; the seller could potentially sue for the other $8,000.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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