What is specific performance in real estate contracts?

Specific performance in real estate contracts refers to a legal remedy where a court orders a party to fulfill their contractual obligations as specified in the agreement. It is typically sought in scenarios where monetary damages would not adequately compensate the injured party, especially in real estate transactions where the property is unique and cannot simply be replaced with money.

When a buyer pursues specific performance, they are asking the court to compel the seller to complete the sale as originally agreed, rather than just awarding them financial compensation for a breach of contract. This reflects the principle that in real estate, the specific property is often viewed as uniquely valuable, and buyers may strongly desire the property itself rather than other forms of compensation.

In contrast, while financial settlement is a part of many contracts, it does not encapsulate the essence of specific performance. Additionally, renegotiating contract terms is not what specific performance entails; it involves adhering to the original terms of the contract. Lastly, specific performance is not a type of financing, but rather a legal action taken when a contract is breached.