Definition
The process of resolving disagreements between buyer and seller regarding contract obligations through negotiation, mediation, arbitration, or litigation. Most disputes involve repairs, earnest money, or closing delays.
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Effective dispute resolution requires clear documentation of the disagreement, understanding of the contract language, and communication between the parties. Many disputes can be resolved through negotiation if both parties remain reasonable and flexible. Contracts typically outline a progression: first negotiation, then mediation, then arbitration or litigation.
Pro Tip
Address disputes promptly and document all communications. Unresolved disputes create closing delays and legal complications.
Example
Dispute resolution for a disagreement over who should pay for roof repairs begins with negotiation between the parties, proceeds to mediation if negotiation fails, and could result in arbitration or litigation if mediation is unsuccessful.