Sellers Bound to Contract

Question: When a buyer and seller sign the contract, the buyer risks losing the deposit for canceling the sale. But what binds the seller to complete the sale? After the buyer goes through the work of obtaining a mortgage, what happens if the seller cancels at the last minute?

Answer: That’s an easy question. If the home seller fails to deliver the deed as agreed, the buyer can sue the seller for specific performance of the sales contract.

To prevent the seller from selling to another buyer, or refinancing, such a buyer should also record a “lis pendens,” which means anyone dealing with the property does so subject to the outcome of the pending litigation.

Robert J. Bruss is a syndicated columnist, as well as a real estate investor, lawyer, broker and educator in the San Francisco Bay Area.