A lot of attention has been focused on what a home buyer needs to be aware of in a purchase transaction. Indeed, sellers have fewer things to worry about than buyers. Unlike buyers, sellers don’t have to secure any financing or worry about that the house may be subject to any lien. However, being a home seller doesn’t come with no risks. Generally speaking, there are three goals that a home seller hopes to achieve in a transaction: 1. Maximize the profit 2. Protect him/herself and to avoid any future dispute raised by the buyer 3. Minimize any loss as a result of any failed transaction.
The First Goal: Maximize The Profit
A lot of home sellers hire a realtor to help sell their home. Sellers’ real estate agents owe a fiduciary duty to the sellers and must act in the best interest of their clients. However, a canny realtor could use psychological tactics to make the seller accept a price which is lower than what the house can actually sell for. Some realtors may even engage in “dual agency”, which means representing both the seller and the buyer in the same transaction to maximize the commission.
The Second Goal: Avoid Future Dispute
A seller should at all times be honest and forthcoming with the information about the property that is to be sold. Any active concealment of the home defect can be a reason for the buyer to allege negligent or fraudulent misrepresentation, which may nullify the transaction, and make sellers liable for the damages as a result of the misrepresentation.
In some cases, a seller may sell the current home to buy a new home. It can be risky for the seller if the seller schedules the closing date of the new home only a few days after the closing of the current home. In the event where the buyer fails to close, the seller may find itself in a situation that he is in breach of the contract in the purchase transaction.
Third Goal: Minimize Any Loss As A Result Of Any Failed Transaction
In the event where the buyer fails to close the transaction, the seller’s real estate lawyer should immediately notify the seller and obtain instruction from the seller. The seller has the option to extend the closing date or hold the buyer in breach and claim damages. In the latter case, the seller also has the obligation to mitigate the loss by immediately putting the property back to market for sale. If the property is successfully sold, but at a lower price, the seller has a claim against the original buyer for the difference between the new sale price and the originally contracted sale price.
This article is intended for public education only. If you require assistance with the sale of your property, please get in touch with our real estate team at MEHDI AU LLP today.
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