Can a Seller Change Their Mind

Ask Phyllis!  A blog series of frequently asked real estate questions.  Have a question about real estate?  Email us here

Dear Phyllis,

I have been reading your advice column for years and don’t think I have seen you address this problem. Can a seller back out of escrow after they have signed the contract? The seller accepted my son’s offer, he applied for a loan, had an inspection and now the seller’s Realtor called his agent to say they changed their mind. His fall wedding nears and therefore he really wants a home for his new wife. Can a seller change their mind? In my mind I think my son has a valid contract, right?

Puzzled

Dear Puzzled,

I am a Realtor not an attorney and cannot offer legal advice. But I can share several instances I have been involved with when the home seller changed their mind. For example, several years ago I represented a buyer in a similar situation. As the home had been on the market for over a month, I assumed there would be some flexibility in the selling price. I prepared an offer, the seller countered the price, and my client countered the seller’s price. We finally came to terms and opened escrow.

After a couple of weeks, the sellers’ real estate agent told me the seller was cancelling because she thought she sold the home for too little. I drafted a letter stating that I had earned my commission. I still expected payment and that the buyer needed reimbursement for the inspection and appraisal fees. Once the seller realized she would be out of pocket these costs, she agreed to close escrow on the agreed upon terms. So I suggest your son’s agent draft a similar request to the seller. It’s up to the listing agent to determine if they also want to be compensated for this “sale”.

Years ago a Realtor acquaintance asked me to help establish a listing price for a magnificent fixer. The home was in horrible condition, the owner had dogs that ran wild in the home; stained flooring and smelly. The owner inherited the home from her parents and could no longer afford it. The home listed and sold to investors who were going to repair the home and flip it. Three weeks into escrow the seller decided she wasn’t going to sell the home. The investors hired an attorney however, and threatened to sue the seller for “specific performance”. The seller closed escrow.

Have your son’s Realtor start with a demand to be paid and your son reimbursed for all out of pocket expenses. If that doesn’t work have your son contact a real estate attorney.

Best of luck to your son.

Related Post: Specific Performance