Living the San Francisco Dream

head_left_image

FAQ #4: What are Liquidated Damages?

FAQ: What are Liquidated Damages?

In the purchase contracts typically used in northern California, the buyer and seller need to decide whether or not they agree to the liquidated damages provision.


If they do agree, in the event buyer breaches the contract and fails to complete the purchase, the seller can retain buyer's deposit (not to exceed 3% of the purchase price in a 1-4 unit property) as the seller's only recourse. Both buyer and seller need to agree to the provision by initialing the Liquidated Damages clause, or it's not part of the contract.

This provision provides a bit of security to both parties. A seller is allowed to keep the deposit up to the 3% limit, is released from the obligation to sell to that buyer, and is free to sell the property to another buyer. In our high-priced market, that 3% is often $25,000 or more.

Buyers stand to lose their deposit should they change their mind or otherwise not be able to close on the purchase after removing all their contingencies. However, should some catastrophy have arisen and the market tanked, the seller cannot come after the buyer for more than their 3% deposit, even if the property subsequently sells for much less than the original contract price.

Liquidated damages - another part of a purchase contract which needs to be understood.


--- Come for a visit; Stay for a lifetime!

Lottie Kendall, Realtor®

Compass

CA DRE#10215160; 650-465-4547

Lottie@LottieKendall.com

www.LottieKendall.com

Peninsula Living Business Page

www.SFCondosForMe.com

 

 

Comment balloon 6 commentsLottie Kendall • May 28 2012 08:20AM
FAQ #4: What are Liquidated Damages?
share
FAQ: What are Liquidated Damages? In the purchase contracts typically used in northern California, the buyer and seller need to decide whether or not they agree to the liquidated damages provision If they do agree, in the event buyer breaches the… more
Earth Day 2012
share
Earth Day, 2012 Sunday, April 22, 2012 -- Earth Day. Did the various Earth Day activities in your area give you pause for thought? Perhaps you're ending the day with a renewed sense of appreciation for our physical world and the sometimes fragile… more
Bow Wow Meow - San Francisco, San Carlos, Menlo Park
share
Bow Wow Meow Everyone enjoys a clever business name, and "Bow Wow Meow" certainly is fun and catchy. However, pet owners want more. They want a unique shopping experience for specialty items as well as the mundane; a place they can trust… more
Lafayette Park has gone to the dogs
share
Lafayette Park has gone to the dogs -- literally! S an Francisco has numerous neighborhood parks, and each has its own flavor. Lovely Lafayette Park sits atop a knoll high in the Pacific Heights neighborhood in San Francisco, with stunning views in… more
Who Let the Dogs Out!
share
Who Let The Dogs Out! S an Francisco is a city that loves its pets! Yes, we love the Giants, too, and some of you will remember that song being played at AT&T Park many a time. But today, I'm talking about pets, dogs in particular. … more
Why Living in the San Francisco area is so great--Reason #9--City…
share
Why Living in the San Francisco area is so great - Reason #9--City Hikes! Some people are surprised that as empty nesters my husband and I chose to move to San Francisco, especially when we both work on the Peninsula. After all, they reason,… more
Why Living in the San Francisco area is so great - Reason #8--ZIP…
share
Why Living in the San Francisco area is so great - Reason #8 -- Zipcars! I first learned about Zipcars when my daughter lived in Boston. Now I see them heading up and down the freeway between San Francisco and San Jose. This is a great… more
Why Living in the San Francisco area is so great - Reason #7
share
Why Living in the San Francisco area is so great - Reason #7 The Mountain Play on Mount Tamalpais in Marin County Having a wealth of outdoor activities near at hand is one of the benefits of living in San Francisco or elsewhere in the San… more
Why Living in the San Francisco area is so great - Reason #6
share
Why Living in the San Francisco area is so great - Reason #6 Golden Gate Park People all over the country (and the world) know of San Francisco's Golden Gate Park The Music Concourse, Japanese Tea Garden, Academy of Sciences, deYoung Museum, Stow… more
Why Living in the San Francisco area is so great - Reason #5
share
Why Living in the San Francisco area is so great - Reason #5 The lovely walk to my branch library The small physical size of San Francisco and its many distinct neighborhoods creates an atmosphere conducive to walking. A short walk (7 blocks) from… more