Damages at Issue in Real Estate Contract Dispute

In this case, a California couple signed a contract to buy an Iowa home.  The purchase of the Iowa home was not contingent upon the buyer’s selling their California home or obtaining acceptable financing.  The contract provided for inspection of the Iowa home within 10 days, but the buyers waived their inspection right by not filing a written repair request within the ten-day timeframe.  The contract explicitly stated that if the buyers waived their right to inspect, the sellers were not responsible for repairs.  Shortly after signing the contract, the buyers e-mailed the sellers’ real estate agent stating that the sale of their California home did not go through.  The buyers indicated that they still wanted to complete the purchase of the Iowa home, but only upon the sale of the California home.  The buyers sought a refund of their earnest money, but the sellers refused and sued for breach of contract.  The trial court ruled for the sellers.  The repair clause was clear and there was no way for the buyer’s to void the contract.  The trial court awarded damages based on the sellers’ expectation interest, determining value largely on the expert testimony of the sellers’ real estate agent.  On appeal, the court affirmed, also noting that the sellers exercised reasonable diligence in selling the home to a third party.  Waters v. Wolfe, No. 7-962/07-0619, 2008 Iowa App. LEXIS 45 (Jan. 30, 2008).