How does "specific performance" relate to real estate contracts?

Specific performance is a legal remedy that compels a party to fulfill their obligations under a real estate contract, rather than simply providing financial compensation. In the context of real estate transactions, this remedy is particularly significant because each piece of real property is considered unique. Therefore, when a buyer enters into a contract to purchase a specific property, they are often looking for that exact property rather than an equivalent substitute.

For example, if a seller initially agrees to sell a home but later refuses to complete the transaction without valid justification, the buyer may seek specific performance through the courts. This would require the seller to proceed with the sale as previously agreed, rather than just granting monetary damages to the buyer. This remedy emphasizes the idea that, in real estate, fulfilling the terms of the contract and transferring the property is often the most crucial outcome, reflecting the unique value of real estate in transactions.

The other options do not accurately capture the essence of specific performance. Financial compensation does not address the need for the unique property in question, termination of the contract without penalty does not align with the goal of enforcing contractual obligations, and allowing a seller to raise the price before closing does not relate to enforcement of the contract as agreed.