“The consideration establishing a valid contract for the sale of immovable property is the promise of payment of the buyer”; rejecting the argument that because the buyer “did not pay the [promised] deposit of $600,000, the parties` agreement did not have the necessary consideration to create a binding contract”); Century 21 All W. Real Estate & Investment Inc.c. Webb, 645 P.2d 52, 55 (Utah 1982) (“[T]he agreement contained mutual promises providing reasonable consideration for making the agreement binding”; “We can`t agree. that the Earnest Money deal failed due to a lack of consideration because the seller.. never received the $100 deposit. »); Cowman v. Allen Monuments, Inc., 500 S.W.2d 223, 227 (Tex. Ct. Civ. App.
1973) (idem). Since the vast majority of residential buildings have minor or major problems or necessary repairs, an inspection clause of this type in practice allows the buyer to withdraw from the contract or renegotiate after the contract has been signed. Therefore, this is a provision that is very friendly to the buyer and potentially very detrimental to the seller. Many sellers therefore insist that the inspection of the house and all subsequent negotiations take place before the signing of the agreement and that the agreement does not include an inspection clause. Some sellers consider that a lack of deposit is unfair. Why, they ask, should they take their home off the market if the buyer is not serious enough to leave a deposit? A seller can certainly insist on a deposit before accepting the contract, and a deposit can be added if the buyer agrees. However, the law does not require it. This is simply part of the seller`s counter-offer, just as he sometimes asks for other requirements like proof of money or a pre-qualification letter. According to the Florida Bar Association, “the conclusion of a contract is concluded when there is an offer and the acceptance of the exchange of `consideration` between the contracting parties. This offer and acceptance is sometimes referred to as a “chiefs` meeting.” If the parties have not reached a meeting of minds, then there is no agreement. If the seller violates, i.e. the seller refuses to close, the financial compensation will not be considered reasonable. Since each property is considered unique due to its location, the buyer can only really get the “benefit of their bargain” if the buyer is actually assigned the property.
Therefore, in cases where the seller violates a valid real estate purchase contract, the courts force the seller to make the sale required by the contract. This remedy is called “specific performance”. [3] In other words, the payment of the deposit is not a prerequisite for the conclusion of a binding contract. To solve this problem, many real estate contracts require the buyer to quote a certain percentage of the real money sale price at the time of signing the contract. If the buyer then violates the contract, the seller is entitled to withhold the real money (deposit) as compensation for the breach. This type of clause, which determines the amount of damages in the event of default, is called “lump sum damages”. These clauses are generally considered valid as long as the situation is such that the actual damage caused by the expectation is difficult to measure and if the amount of the lump sum damages claimed represents a reasonable approximation of the actual damage suffered by the seller. [5] If you are a listing broker and you receive a contract that is funded in cash or 100% with a deposit amount of “0”, you must present it to the seller. The contract is valid despite the absence of a serious deposit of money. It is acceptable to tell the seller that since there is no down payment, there is nothing the seller can keep as lump sum damages if the buyer defaults.
However, buyers and sellers can negotiate these terms and conditions like any other condition of their agreement. Modern practice generously uses the e-mail transmission of offers and acceptances. The problem is that while technology allows payment over the Internet, it doesn`t do so in terms of deposits. Instead, the purchase contract can be delivered electronically, signed electronically or printed, signed and scanned. The deposit check then follows hours or days later. Other important questions would be: If there is no binding contract, does the seller have to correct a title defect? Or can the seller accept an offer from another buyer who is willing to pay a higher price? It is best to pay a portion of the purchase price in advance to have peace of mind that a property you wish to purchase is under contract and that all eventualities and terms of a valid purchase and sale agreement are available to you. .