Needless to say, don't sign anything.
What a mess...the problem is that your parents sent a counter offer. At that point all the buyers needed to do was agree within the time frame specified on the contract. Once your parents sent that counter offer....they were obligated to the buyer. The buyer and the agents now have cause for damages based on the seller not performing.
But....that being said....there are people involved. I would advise you talk to the listing agent's broker and the buyer's agent's broker. See if you can work something out without going to arbitration. If your parents refuse to sign things which allow the home to transfer title....it can be a long drawn out thing and the buyers and agent might just agree to move on.
Good luck with this.....if you don't get anywhere with the brokers, you need to get an attorney to advise you on next steps.
A listing agreement is a form of employment contract with the Realtor. Sellers can terminate this agreement in writing.
Since your parents knew of an offer and even counter offered, there then comes into question as to when or if there was an "offer and acceptance". That's where the lawyer comes in again.
As for the Realtor, your parents can file a grievance with the agents Association of Realtors. They may or may not do anything.
You can pretty much fight anything that you are willing to pay to fight. The problem is, what is that going to cost you and can you win in court? I would recommend you speak to a good Real Estate Attorney to explore you options.
Another matter is going to be the commission. Depending upon the precise "he said, she said" it is possible that technically if the listing agent produces a ready, able, and willing buyer then the seller, whether they sell or not, owes the commission.
Reading between the lines in your post it seems that there may be some other issues, so by talking with the Realtor's broker you can be sure to get the best result. If you think you need to see an attorney for legal advice, then do so immediately.
I was in a similar situation several months ago when I represented the buyer and the seller (the other side) decided to "pull the plug." To be frank, in working with attorneys, we learned that the seller can, in fact, back out of the sale, and our recourse against the seller of this tract home was pretty limited. In fact, we learned that neither Buyer nor Seller can be "forced" into consummating a purchase of a home in California. Provided the Seller is willing to compensate the buyer for their inspection fees and costs, that may be all it takes to cancel the sale. There may not be any commission due to the buyer's agent if the seller's agent is not paid--the buyer's agent is, after all, a sub-agent of the listing agent here in California.
Although your parents may have tried to exercise their right to cancel the contract, at this time, since the sale has been progressing, they need to contact a real estate attorney to extricate themselves from the contract. Specific performance, I was told, is seldom available to home buyers when the home is neither unique (like a custom built home) or special as to location, view, geography so that a comparable home cannot be found by the buyers in the due course of time. Of course, only a qualified attorney can review your situation and provide you with applicable legal opinions in this case.
Good luck and I would suggest bypassing the broker and agents in favor of a quick review and opinion by a qualified attorney. Good luck!!
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