What to do if a seller wants to back out of ahouse sale?

We are now in the contract period for closing on a house that I purchased. I’ve deposited 3% in escrow. The Seller now wants to back out of the sale. He is offering us $5000 to back out because he doesn’t want to sell anymore. He claims that he has a sister who is threatening to take legal action because she thinks the price that they sold for is too low. The sister is not on the title of the house. However he claims he and his sister reached a private agreement and she can use that as a basis to file lien. Should I just take the $5000 and move on?

Asked on October 15, 2011 under Real Estate Law, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

In California if you have a written contract to purchase a parcel of real property and you have every intent on closing and you can close escrow, just because the seller wants to back out of the sale of the parcel you do not have to agree to do so. Meaning, if you want this property that you are in contract for, you need to advise the seller through your real estate agent (assuming you have one) that you intend to close escrow on the stated date.

If the seller refuses to sign the necessary documents to allow you to close escrow (assuming you want to go through with the sale) you can file a lawsuit against the seller for specific performance of the contract after you record a lis pendens on it to keep it from being transferred to some other person.

I suggest that you consult with a real estate attorney if the seller refuses to close escrow on this sale. If you do not want to close the sale you should tell the seller that you would take $25,000 (or more) to cancel the purchase contract.

Good luck.

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