Legal Question in Real Estate Law in California

Re: Can seller back out of home sale contract?

Some purchase contracts have a liquidated damages clause which means the damages you can collect are limited by the contract and you can not enforce the close of escrow. Other purchase contracts allow you to enforce the contract. With out reviewing the contract it is difficult to determine what terms and contingencies may exist in your contract.

Re: Can seller back out of home sale contract?

Some purchase contracts have a liquidated damages clause which means the damages you can collect are limited by the contract and you can not enforce the close of escrow. Other purchase contracts allow you to enforce the contract. With out reviewing the contract it is difficult to determine what terms and contingencies may exist in your contract.

Re: Can seller back out of home sale contract?

"Can they"? Of course, it happens every day. Whether the buyer can do anything to compel the sale is a different question that depends upon all the facts.

Re: Can seller back out of home sale contract?

I would add tthe following to the previous answers:

A party's decision to breach a real-estate contract after a change of mind, or the non-breaching party's decision to sue on the breach or walk away, may be influenced by whether the desposit and purchase agreement contains mediation, arbitration, and/or attorney fee provisions.

The parties' decisions may also be influenced by the size of the deposit and whether it is all non-refundable. There may be a 3% statutory cap on the nonrefundable amount.

Once is a while, there may be a contingency in a sale agreement that the seller can invoke, but most real estate sale contingencies are to protect the buyer, not the seller.

Finally, the buyer may be entitled to the rather drastic remedy of specific performance, where a judge or arbitrator can order the seller to go through with the closing. A seller could end up a big loser if ordered to sell and also to pay the buyer's attorney fees and costs.

It may be better to renegotiate the sale or negotiate a rescission than to be arbitrary or confrontational.