For What It's Worth
Arboreal Timing
The late Betty Moger, who ran Cleveland, Duble and Arnold practically forever, liked to say that if you waited for the dogwoods to blossom before putting your house up for sale, you missed the market. Mrs. Moger was right about everything (just ask her son, Dan) and this adage was no exception. While intuition would suggest that houses sell better when seen on sunny, warm spring days, the bleak days of March hold the most buyers. Go figure and, if you’re planning to sell your house this spring, go get ready now.
Contracts Are (Sometimes) Forever
When you signed a contract to buy your home in Greenwich you probably paid a ten percent deposit and agreed to forfeit that sum if you defaulted. This “liquidated damages” clause gives sellers the confidence to go out and commit to buying another house for themselves and often causes buyers to break out in a cold sweat late at night when their mortgage broker doesn’t return their calls. But what happens if the buyer is transferred to another state before buying? Or can’t sell the house he was hoping to move up from? Is that deposit really gone? Will courts permit voluntary acts of capitalism between consenting adults?
Like everything else in law, it depends. Jeremy Kaye, one of the best real estate lawyers in town (and yes, his brother Joel is another—it’s unseemly when they squabble for attention like this) kindly researched the applicable law on the subject and sent the defining cases my way. That he made me read them myself instead of providing a nice summary only partially diminishes my opinion of the man. The basic answer is that, notwithstanding the label “liquidated damages”, the seller who wants to retain the deposit is going to have to prove that he suffered damages. The law will not enforce a forfeiture where there are no damages. In the Superior Court case of Paul v. Levine, CV00-0180414S (February 25, 2002), a seller contracted to sell his house for $890,000. That buyer defaulted when he was unable to sell his own house and the seller then sold the property to someone else for $945,000. The court would not permit the seller to keep the original buyer’s deposit, using the old “no harm, no foul” theory of jurisprudence.
As a lawyer long ago, I represented a client who kept two full deposits before finally, and regretfully, completing the sale to a third. But we were lucky that neither buyer had the stomach for a protracted legal battle. Lesson here is that, in a rising market, a defaulting buyer may well be able to retrieve some or all of his money eventually. Not right away, though. The plaintiff in Paul v. Levine waited two years and the unhappy homeowner involved in the Connecticut Supreme Court case of Vines v. Orchard Hills, Inc. 181 Conn.501 (1980) waited seven (and lost). Of course, if the market is not rising and your seller does suffer a loss, it’s coming out of your deposit, so beware.
If I had a Million Dollars
I couldn’t buy much in town. But if I had three million, and wanted to live in a bucolic setting minutes from downtown Greenwich, I’d look at Dancy Cassell’s listing at 640 Lake Avenue. Once owned by the great bird carver, El Arnold, this barn-like house (my term-Dancy would probably prefer “country farm house”) is set back from Lake Avenue on a great big lawn that swoops down to a nifty little pond. It is perfect for artists, writers or anyone who’d like to feel like one.
And if I had five million dollars, I’d be drawn to Lyn Stevens’ new listing on Glen Avon Drive in Riverside. Almost seven thousand square feet with five bedrooms, it still fits nicely on its lot. What is perhaps the smallest park in town is directly across the street, protecting the view over Cos Cob Harbor. No pool (hey, it’s only five million dollars) but an approved site for one. Glen Avon has more kids per square foot than I can count. It’s a terrific street for families.
Great Moments in Real Estate Advertising
From a Weichert (New Jersey) ad: “The circular, Belgium block driveway brings your visitors to the grand entrance where two, twelve-foot-high mahogany doors open to an intimidating grand foyer.” You suppose they’re selling Tony Soprano’s house?
The late Betty Moger, who ran Cleveland, Duble and Arnold practically forever, liked to say that if you waited for the dogwoods to blossom before putting your house up for sale, you missed the market. Mrs. Moger was right about everything (just ask her son, Dan) and this adage was no exception. While intuition would suggest that houses sell better when seen on sunny, warm spring days, the bleak days of March hold the most buyers. Go figure and, if you’re planning to sell your house this spring, go get ready now.
Contracts Are (Sometimes) Forever
When you signed a contract to buy your home in Greenwich you probably paid a ten percent deposit and agreed to forfeit that sum if you defaulted. This “liquidated damages” clause gives sellers the confidence to go out and commit to buying another house for themselves and often causes buyers to break out in a cold sweat late at night when their mortgage broker doesn’t return their calls. But what happens if the buyer is transferred to another state before buying? Or can’t sell the house he was hoping to move up from? Is that deposit really gone? Will courts permit voluntary acts of capitalism between consenting adults?
Like everything else in law, it depends. Jeremy Kaye, one of the best real estate lawyers in town (and yes, his brother Joel is another—it’s unseemly when they squabble for attention like this) kindly researched the applicable law on the subject and sent the defining cases my way. That he made me read them myself instead of providing a nice summary only partially diminishes my opinion of the man. The basic answer is that, notwithstanding the label “liquidated damages”, the seller who wants to retain the deposit is going to have to prove that he suffered damages. The law will not enforce a forfeiture where there are no damages. In the Superior Court case of Paul v. Levine, CV00-0180414S (February 25, 2002), a seller contracted to sell his house for $890,000. That buyer defaulted when he was unable to sell his own house and the seller then sold the property to someone else for $945,000. The court would not permit the seller to keep the original buyer’s deposit, using the old “no harm, no foul” theory of jurisprudence.
As a lawyer long ago, I represented a client who kept two full deposits before finally, and regretfully, completing the sale to a third. But we were lucky that neither buyer had the stomach for a protracted legal battle. Lesson here is that, in a rising market, a defaulting buyer may well be able to retrieve some or all of his money eventually. Not right away, though. The plaintiff in Paul v. Levine waited two years and the unhappy homeowner involved in the Connecticut Supreme Court case of Vines v. Orchard Hills, Inc. 181 Conn.501 (1980) waited seven (and lost). Of course, if the market is not rising and your seller does suffer a loss, it’s coming out of your deposit, so beware.
If I had a Million Dollars
I couldn’t buy much in town. But if I had three million, and wanted to live in a bucolic setting minutes from downtown Greenwich, I’d look at Dancy Cassell’s listing at 640 Lake Avenue. Once owned by the great bird carver, El Arnold, this barn-like house (my term-Dancy would probably prefer “country farm house”) is set back from Lake Avenue on a great big lawn that swoops down to a nifty little pond. It is perfect for artists, writers or anyone who’d like to feel like one.
And if I had five million dollars, I’d be drawn to Lyn Stevens’ new listing on Glen Avon Drive in Riverside. Almost seven thousand square feet with five bedrooms, it still fits nicely on its lot. What is perhaps the smallest park in town is directly across the street, protecting the view over Cos Cob Harbor. No pool (hey, it’s only five million dollars) but an approved site for one. Glen Avon has more kids per square foot than I can count. It’s a terrific street for families.
Great Moments in Real Estate Advertising
From a Weichert (New Jersey) ad: “The circular, Belgium block driveway brings your visitors to the grand entrance where two, twelve-foot-high mahogany doors open to an intimidating grand foyer.” You suppose they’re selling Tony Soprano’s house?
posted by Chris Fountain at 12:21 PM
0 Comments:
Post a Comment
<< Home