By: Edward Hale, Fort Myers Board Certified Real Estate Attorney
In rising markets like ours, some property prices are going through the roof. For these properties, the value is often higher at the time of closing than it was at the time the contract was signed. As a result, many sellers have been stricken with a terrible case of “seller’s remorse”. The strongest symptoms of “seller’s remorse” are not wanting to close or demanding that the buyer pay more for the property.
But if a seller does not close in accordance with the sales contract, then most contract forms state that the buyer can sue the seller for “specific performance”, which is legaleze for asking a court to require that the seller sell the property to the buyer at the price and terms stated in the contract.
But like most legal issues, specific performance is not black and white. In Florida, in order for a buyer to be entitled to specific performance, the buyer must prove that he or she was “ready, willing and able” to perform under the contract, OR prove that he or she was “excused from such performance.” In other words, the buyer must have all the closing documents signed and have all of the purchase funds (including lender funds) ready ON THE CLOSING DATE.
“Ready, willing, and able” is a key legal phrase. Indeed, it is THE key legal phrase in specific performance cases. And it can be a tough thing for a buyer to prove.
The 2004 Fourth District Court of Appeals of Florida case of Leverette v. Cochran, 876 So. 2d 2 shows why.
In Leverette, a seller refused to honor a contract to sell a piece of property to a buyer, and the buyer sued the seller for specific performance. The court stated:
“In order for a purchaser to obtain specific performance of a real estate sales contract, they must allege and prove that [they have] either paid the balance [of the purchase price funds], tendered the balance, and [they were] ready, willing and able to pay such balance or [they have] been from excused such performance.”
The court concluded that in that case, the buyer had not paid or tendered the balance of the purchase price funds, nor was the buyer “excused from such performance”.
What does this mean to all of you? As I often state in my lectures, if you represent a buyer, you need to make sure everyone has their act together, including you, the buyer, the lender, the title company, the appraiser, the surveyor, etc. If any of those people don’t do their job in a timely fashion, then the buyer may not be ready to close 5 p.m. on the closing date, in which case the buyer would not be “ready, willing and able” to close.