Common Contract Disputes in Real Estate Transactions and How to Resolve Them
Real estate transactions involve substantial financial investments and confusing legal contracts that bind buyers, sellers, agents, and lenders. When disputes arise over these agreements, the stakes are high. At Bruntrager & Billings, our St. Louis real estate attorneys represent clients in contract disputes, working to resolve conflicts efficiently while protecting our clients’ legal and financial interests.
Common Types of Real Estate Contract Disputes
Our real estate lawyers see several common disputes arise involving real estate contracts.
Breach of Purchase Agreement Terms
The most fundamental dispute occurs when one party fails to fulfill obligations outlined in the purchase agreement. Sellers may refuse to complete repairs they agreed to make, fail to vacate the property by the closing date, or attempt to back out of the sale entirely. Buyers may fail to secure financing by agreed deadlines, refuse to close after inspections reveal issues, or attempt to renegotiate terms at the last minute.
Disclosure Failures
Missouri law requires sellers to disclose known material defects affecting the property’s value or safety. Disputes frequently arise when buyers discover undisclosed problems after closing, including foundation issues, water damage, mold, electrical problems, or environmental hazards. Our lawyers work to hold sellers who knowingly conceal defects face liability for repair costs.
Financing Contingency Issues
Most purchase agreements include financing contingencies allowing buyers to withdraw if they cannot secure mortgages. Disputes occur when buyers claim financing fell through but sellers believe the buyer didn’t make good faith efforts to obtain loans, or when sellers want to keep earnest money deposits after buyers invoke financing contingencies.
Inspection Contingencies and Repair Negotiations
After home inspections reveal problems, buyers typically request repairs or price reductions. Sellers may refuse to address issues, leading to disputes about whether discovered defects constitute material problems requiring remediation or minor issues buyers should accept.
Title Issues
Clear title is essential for real estate transfers. Disputes arise when title searches reveal liens, easements, encumbrances, or ownership claims that weren’t disclosed. Questions about who must resolve these issues and whether they justify contract termination create significant conflicts.
Appraisal Disputes
When properties appraise below the purchase price, disputes emerge over whether buyers can renegotiate, whether sellers must reduce prices, or whether either party can terminate the contract. Lenders won’t finance amounts exceeding appraised values, forcing parties to resolve these gaps.
Commission Disputes
Real estate agents sometimes dispute commission amounts or whether they’re entitled to commissions when transactions fall through. These conflicts can involve multiple brokers and complex questions about procuring cause and contractual entitlements.
Closing Delays
Time is often of the essence in real estate contracts. When closings are delayed due to financing issues, title problems, or other complications, disputes arise over extensions, penalties, and whether delays constitute material breaches justifying contract termination.
Resolution Methods for Real Estate Contract Disputes
Many disputes are resolved through direct communication between parties and their real estate attorneys. This informal approach is fastest and least expensive, allowing parties to reach compromises on repairs, price adjustments, or timeline extensions without formal proceedings.
When direct negotiation fails, alternative dispute resolution like mediation or arbitration can provide a structured environment to facilitate compromise or obtain a decision out of court. In fact, many real estate contracts include mediation or arbitration clauses requiring this step before litigation.You should always have legal representation during these ADR proceedings.
When other methods fail or aren’t appropriate, litigation through Missouri courts may be necessary. Lawsuits allow parties to pursue breach of contract claims, specific performance (forcing completion of the sale), rescission (canceling the contract), or damages for losses suffered. Litigation is sometimes necessary to protect substantial interests or establish legal precedents.
Protecting Your Interests With Our St. Louis Real Estate Attorneys
Real estate contract disputes require prompt action and experienced legal counsel. Contracts contain strict deadlines, and failure to act quickly can forfeit your rights. At Bruntrager & Billings, we review contracts, identify breaches and available remedies, negotiate with opposing parties, represent clients in mediation and arbitration, and litigate when necessary to protect your real estate investment.
If you’re facing a real estate contract dispute in the St. Louis area, contact Bruntrager & Billings today for a consultation and let our experienced real estate lawyers help.