In Illinois what are consequences of breaking a real estate home contract?

Answer 1

Are you seller or buyer?

If you're the seller and buyer breaks the contract,

1. most contracts say the buyer loses their earnest money.

2. most contracts say the seller can sue you to force you to buy ("specific performance").

3. In today's economic climate, the contract may say that if the seller later sells for a lower price, you could be liable for the difference.

4. The contract may provide for additional or less remedies.

If you're the buyer and the seller breaks the contract,

1. most contracts say the buyer gets their earnest money back.

2. most contracts also give the buyer the right to sue to force the sale.

4. because every piece of real estate is considered unique (even identical condos that may be side by side or upstairs or down from each other) if you wind up having to spend more for another home, generally the buyer does NOT get the right to sue for the additional money it costs.

5. The contract may provide for additional or less remedies.

As between the seller and its broker, if the contract says the broker gets a commission even if the sale doesn't close, the seller could lose a portion of the earnest money that is retained. As a practical matter most brokers don't ask for that because the most likely result is losing the listing. But if the seller breaks the contract, the broker will probably attempt to get its commission. If the parties don't find a way to settle the situation amicably, most contracts, and Illinois law, require residential brokers in these situations, to deposit the earnest money into court and file a lawsuit ("interpleader") that pits the seller against the buyer and then let them duke it out.

Any way you look at it, it can be a big mess.