What happens if a property is destroyed before closing?

When a property is destroyed before closing, the outcome is typically determined by the terms outlined in the sales contract. This document often includes clauses that address how such situations will be handled, including at what point risk is transferred from seller to buyer and whether the seller is obligated to repair damages before the sale is finalized.

If the contract specifies what happens in the event of destruction, it guides both parties on their responsibilities and options. For example, the contract might indicate that the seller retains the responsibility for repairs until closing, or it may allow the buyer to claim damages or renegotiate certain terms based on the condition of the property.

In absence of specific contractual terms, the parties may find themselves in a situation where they need to negotiate new terms, but the clarity provided by a well-drafted contract is key to avoiding disputes. Understanding how contracts function in these scenarios is crucial in real estate transactions, emphasizing the importance of specificity in legal agreements.