Here's an interesting report: Certain Chicago developers and builders have taken to suing buyers who walk away from their contract to purchase before close. Damages are sought for expenditures for upgrades and the earnest money.

This is another ugly side of the burst real estate bubble. Buyers who put down payments on units during pre-construction now find out that their purchase is worth less than they had bargained for even though they got a discount for agreeing to purchase at an early stage in the the construction. In addition, some are finding that they can't get financing due to the stricter credit standards and the diminished value of their purchase. With sales slowing and inventory increasing, it's hard to convince "new to the development" buyers that all of the units in that particular development will be sold.

So, the original buyers (some might call them speculators) opt for cutting their losses and walk away. Some do this on the advice of their attorneys. Now, they may end up having to pay for more than they expected.

What do you think of this strategy?

There's a first time for everything......

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