http://www.inman.com/hstory.aspx?ID=49778

Massachusetts home seller gets $150,000 damages in full-priced sale

"Beware of real estate contracts that let sellers recover liquidated damages when the buyer doesn't close by a certain date -- they can be enforceable. In Perroncello v. Donahue, a Massachusetts appellate court allowed the seller to keep a $150,000 deposit as damages for the buyer's failure to close by the date set in the contract – even though the home eventually closed for the full asking price of $2.25 million.

Under the contract, the buyer was required to put down $150,000 as a non-refundable deposit that would be forfeited as liquidated damages if he breached. The contract contained a "time is of the essence" clause and had a deadline for closing. When the buyer met with delays in securing financing and sought extensions, the seller refused, and they sued each other. In the meantime, the sale closed nearly five months after the original deadline.

The court held that despite the eventual closing, the buyer breached the contract and the court had no choice but to enforce the "time is of the essence" and liquidated damages clauses. "When parties agree in writing that time is to be of the essence, courts will hold parties to the deadlines they have imposed upon themselves." The court added, "Where liquidated damages clauses are concerned, we explicitly reject a so-called 'second-look' approach … (where a clause is re-evaluated in light of later circumstances)…"

Because the buyer failed to prove the seller waived either contractual provision, he was out of luck – and his $150,000."

Yep! I agree with it. The buyer's agent needs to help their clients understand that, once they pass the feasibility/option periods, the seller does NOT have to extend the closing date.