Thick — and Thin-Skinned — Buyers
First, two disclaimers: 1) in a decade selling real estate, I’ve never had a Buyer or Seller I represented bring — or defend — a legal action or arbitration claim; and 2) lawsuits (or arbitration actions) over “home sales gone bad” aren’t very common to begin with (I’d estimate that well fewer than 1% of all transactions give rise to formal disputes).
But, here’s a “spit ball,” purely anecdotal hunch: Buyers in a rising market are less likely to sue Sellers, post-closing, then Buyers in a declining market.
Why is that?
Because if the $200k home they bought last February is now closer to $210k — the case in many Twin Cities neighborhoods these days — that unexpected $500 hot water heater repair over the Summer stings a little less.
Assuming the Buyer was actually out-of pocket that amount.
Because many Sellers threw in a home warranty policy when the market was softer earlier this year, the unlucky/lucky Buyer may not be out-of-pocket at all, beyond a nominal deductible (typically $100 or so).
Conversely, in a declining market, Buyers have “thinner skins,” and are more likely to scrutinize the Seller’s Disclosure for any perceived inconsistencies or omissions — and consider possible recourse.
No statistics backing any of this up — but that’s the theory, anyway . . .
Sellers vs. Buyers
Don’t Sellers ever sue Buyers?
They do, but not post-closing.
Rather, legal action by Sellers against Buyers typically involves failing to close, and the related fall-out from that (who keeps the earnest money, getting the other party to cancel the Purchase Agreement in a timely fashion, toting up damages from having to re-stage and market the Seller’s home, etc.).
See also, “Residential Real Estate Law: the More Things Change . . .”; “Wet Basements: Who’s Responsible?”