Market Snapshot (Week ending August 3, 2025)
- Only seven homes went under contract.
- Average market time: 30 days, and three needed price reductions.
- Market Index remains strong at 49.
Severe thunderstorms rolled through the St. Croix Valley—from Stillwater to Marine on St. Croix and beyond—knocking out power and toppling legacy trees.
This brings up a crucial question for buyers and sellers in today’s market: What happens if a buyer has a home under contract and a tree falls on the property before closing? Let’s dive into the Risk of Loss doctrine in Minnesota real estate, and what options both parties have.
🏡 What is Risk of Loss in Minnesota Real Estate?
Under Minnesota law and standard real estate contracts, once final acceptance of a purchase agreement is signed, the buyer typically bears the risk of loss or damaging events (such as fire, storm, or fallen tree)—unless the contract specifies otherwise.
This is based on the legal doctrine of equitable conversion, which treats the buyer as the equitable owner once the contract is binding—even before closing . So damage occurring after final acceptance but before closing generally passes to the buyer.
🧩 But what about Minnesota case law & specific contract wording?
- The Risk of Loss Clause in Minnesota Residential Purchase Agreements gives the buyer a legal right to cancel in writing if substantial property damage occurs after acceptance and before closing. Earnest money is then refunded
- Alternatively, parties can agree to repair (using escrow holdback), postpone closing, or renegotiate—there’s no requirement that the seller must repair unless specified.
- If a seller breaches (for example fails to repair pre-existing defects that they agreed to fix), risk might remain with the seller until cured.
✅ What This Means for Buyers and Sellers in Stillwater
For Buyers:
If a tree falls and damages the home after final acceptance:
- You may cancel the contract in writing, get your earnest money back, and walk away.
- Or you may negotiate mitigation—such as escrow for repairs, delayed closing, or seller remediation.
- Check your homeowner’s insurance—you may be able to claim the damage if you hold risk.
For Sellers:
- You are not automatically required to repair unless your contract states so or you agree to it.
- But you should expect negotiations—buyers may request escrowed funds or delayed closing.
- A skilled agent can preserve the deal by finding mutually acceptable solutions.
🎯 How I Help My Clients
As an experienced agent in Stillwater, MN with 32 years in the St. Croix Valley market, I proactively address “what‑ifs” like storm damage. I guide both buyers and sellers by:
- Explaining how the risk of loss clause works.
- Advising on cancellation process or repair paths.
- Coordinating with title companies, inspectors, insurance, and legal counsel when necessary.
- Protecting earnest money and client expectations.
