The single largest purchase for any individual or family is usually a home. It is easy to get lost in the excitement of buying a new home, especially if it is your first home, and fail to consider what can go wrong. What happens if you cannot secure a loan from the bank after you sign a purchase contract? Do you still have to pay the purchase price? Can the seller keep your deposit?
The answers to these questions depend on how the contract is written. The language of the contract is the key. One should never sign a contract without an experienced real estate attorney reviewing its terms to ensure adequate protection.
In February of 2019, the Pennsylvania Superior Court in Maisano v. Avery taught an unwitting buyer a valuable lesson in the importance of contract language. Real estate in Pennsylvania is treated as a unique asset. No two houses are the same. No two tracts of land are the same. As a result, specific performance is generally available as a remedy to a buyer or seller when the other party cannot or will not complete the transfer of title and payment of money.
Specific Performance means that the Court can compel one to purchase a home and take title or one to accept the purchase price and give title to real estate. Why does this matter? In Maisano v. Avery, the buyer was unable to secure the loan to purchase real estate. However, there was no clause in the contract limiting the seller’s damage recovery to the deposit. The seller was able to force Avery to purchase their home because the terms of the contract failed to account for the possibility that Avery may not be able to get the money.
Do not fall into the trap of the excited homebuyer. Trust an experienced lawyer to review your contract and ensure you are protected.