iowahomeloans

Dispute Resolution can Become Expensive, Fast

Posted on: August 6, 2014

Many new homebuyers, or even homebuyers who have purchased before but simply have never run into legal problems during a purchase, underestimate how quickly legal costs can mount. Dispute resolution may seem unnecessary, so you may decide not to include dispute resolution language in your purchase and sale agreement. Or maybe you decide you don’t want to give up your right to court, so you decline to include a dispute resolution clause in your contract. Unfortunately, you may find yourself having to go to court after all, and you could be shocked at how quickly legal fees mount. Try to avoid legal action to reduce costs and keep your sale moving forward in a win-win scenario.

 

What are “Reasonable” Court Costs?

 

It’s not uncommon for buyers and sellers to go to court over disputes worth $5,000 to $10,000 in court. One or both parties may get a specific dollar amount in their heads and be unwilling to compromise, requiring court action to make the other party agree to their demands. However, you might be surprised to find that even a seemingly simple case can quickly mount to $5,000 to $10,000 in attorneys’ fees and court costs.

 

And even if the facts seem clearly on your side, and you believe your opponent may be responsible for the fees – things don’t always turn out as you expect. You could lose even a simple case through judicial error, attorney error, a technicality or even bad luck. This could leave you footing a huge attorney’s fee, as well as not getting the financial award you desire.

 

This is why it’s a good idea to include dispute resolution language in your purchase and sale agreement. And keep in mind that when you and the seller are having trouble agreeing on something, it may be cheaper to disagree by a couple thousand dollars and compromise than to pursue legal action or formal dispute resolution and be stuck with a multi-thousand dollar bill, and possibly no financial award at the end, and lost time in the process.

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1 Response to "Dispute Resolution can Become Expensive, Fast"

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