Can Home Buyers and Sellers Agree to Arbitration AFTER the Sale?

Question #2:  How Realistic Is It That They Will?

Normally, Minnesota home Buyers and Sellers decide when they negotiate the Purchase Agreement whether they will handle any post-closing disputes through arbitration or litigation.

If the parties are amenable to arbitration, they both sign an Arbitration Addendum (their agents, too).

Alternatively, if only one party — or neither party — wants arbitration, they’re deemed to waive it . . . and litigation is the default choice (note: disputes below $15k in Minnesota are now settled in small claims court, also known as Conciliation Court).

And that’s usually the end of it: the vast majority of the time, there are no major issues after closing, and it’s a moot point.

Un-Waiving Arbitration

Which leaves the small % of home sales where there IS a post-closing dispute.

When that’s the case, can a Buyer and Seller who earlier waived arbitration now choose it?

The technical answer:  “yes.”

The practical answer?

It’s not very likely.

That’s because, by the time a dispute arises, communication between the Buyer and Seller is invariably strained, and neither side is amenable to cooperating with the other, even if it may be in their own self-interest.

Or, so I hear . . . (thankfully, I have no first-hand experience).



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