After inspection, seller backed out accepted offer. What should I do?

Asked by tinafaye, Queens, NY Wed Oct 16, 2013

I'm working with a dual agent. My agent's boss is the listing agent. I'm buying a house in Queens, NY.
We wrote an offer and wrote $500 good faith deposit. My first questions is: Is it custom to give a deposit with an offer? Will the seller get the deposit if I back out before the contract is executed?

After my offer was accepted, my agent told me to have home inspection done ASAP so we can get the contract signed soon. My second question is: when will home inspection be performed? before or after contract signed?

During the waiting period of my home inspection, my agent kept pushing me to have the home inspection done ASAP and said they were entertained by several offers. The day after we did home inspection, my agent told me that the seller accepted another offer and my offer became back-offer. My third question is: Can the seller back out accepted offer? What remedy can I get for the expenses I paid?

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Anna M Brocco, Agent, Williston Park, NY
Thu Oct 17, 2013
As long as no executed contract exists, signed by all parties and deposit money is exchanged, the seller if free to do as he/she wishes. Since you state that you gave a $500 deposit along with your offer, a legal technicality could exist, therefore consult with your attorney, he/she can better advise....
2 votes
Joseph Hasti…, Agent, Bayside, NY
Wed Oct 16, 2013
Hi Tina. Why wouldn't you use a broker to look out for your interests? I agree with De Vonte as binders are NOT binding in NYS. Forget this "Exclusive right to represent" also. You cannot bind a buyer to a broker. NYS recognizes the Agency Agreement Form which you should have signed prior to talking about anything substantive with regard to real estate, and Dual Agency. This good faith deposit should be returned immediately to you.

So, you lost out here. The money spent on the inspection is gone as well. What you should do is talk with a few brokers and pick one you can stand to be around. They will actually help you find suitable diggs, help with the process and will advocate in your best interest. Move forward to the next thing. Good luck.
2 votes
Janet Nation,…, Agent, Baldwin, NY
Wed Oct 16, 2013
What a mess.

This is New York so no it is not common to give a good faith deposit with an offer, and you should demand your money back if you don't have it already.

The home inspection is done prior to signing a contract, it helps you determine whether or not you should move forward with the offer to purchase.

I want to correct you, the agent was/is representing the seller. Agents in Queens seldom practice buyer representation. If the agent was also representing your interest, you would have been treated better, that is, the agent would not have made you spend money on a home inspection knowing full well the activities on the house which the agent has almost total control over.

So yes the seller can back out of an accepted offer because there was no legally binding contract, just like you can change your mind if you don't like the findings from a home inspection. You can attempt to get your money back from the inspection but it's unlikely unfortunately.
2 votes
K. Buddha Al…, , Arverne, Queens, NY
Sun Oct 20, 2013
It is not customary to submit funds with an an offer in NYC. The seller is not obligated to sell until the contract of sales is "fully executed"; signed by seller and buyer with consideration from the buyer.

You can contact a lawyer and the NY Dept of State regarding dual agency and what you where led to believe. The broker and agent may or may not be liable. Did you have a "signed" accepted offer? If not then the seller never "accepted" your offer as a matter of law.

In the future you should work with a Buyer Agent. You will pay approximately the same commission and have some legally required to work in your best interest. The expenses that you paid could be considered the price to pay for what NOT to do in a real estate transaction.
1 vote
Craig Zappin, Agent, Huntington, WV
Thu Oct 17, 2013
I would not recommend spending money on the home inspection until you have a legally binding contract. You can add a contingency about having a satisfactory home inspection. As you experienced, while your inspector is checkng out the house, the seller could be signing a contract with someone else.
1 vote
Terry Koraha…, , 11358
Thu Oct 17, 2013
Hi Tina, I have found my sellers and buyers in this same situation many times- Especially in todays HOT market. The right thing to do- go to the agent that was working with you, and insist she get in touch with the seller/agent and get your inspection money back. I always advise my sellers it is their right to accept other offers, but not at the cost of someone else. Ask for your money back and wish the sellers well.

My personal opinion- always do an inspection 1st. If all is well, go ahead and sign contracts and put your down payment. It is a major investment- don't go into it blind. Paying for an attorney before you do an inspection doesn't make any sense. Let me know how you do. Terry 718-614-3167 cell
1 vote
David Zybin, , Brooklyn, NY
Thu Oct 17, 2013
You had no legal binding contract with the seller, binder does not constitute one. You should get your deposit back, but written demand will speed it up. All your expenses were voluntary and seeking remedies will result in more time and money wasted. I know this is not what you want to hear, but move on with your search. You should sign next contract with "subject to satisfactory home inspection" clause to alleviate stress. Best of luck with your next find.
1 vote
Tom Dawson, Agent, New York, NY
Thu Oct 17, 2013
You have received a lot of good answers from others. The one thing I would reinforce for you is to find a broker that will represent you. As a broker if I have a listing, my fiduciary responsibility is to my seller. So as others have said, find a broker that you feel comfortable working with. so that he can represent you, not the seller.
I assume you're looking in Queens. I would be happy to represent you if I worked Queens. But I don't. But if you would like a recommendation, some of my associates live and work there so would be glad to refer. You can reach me at or cell 310-951-8993
1 vote
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Wed Oct 16, 2013
Tina, yes it's customary to pay a $500 good faith deposit when making an offer. The inspections should generally happen before you sign the sales contract so that if anything comes up in the inspection you can negotiate along with the terms of the contract. Also, the seller does have the right to back out of any offer. Until a sales contract is fully executed, the seller and buyers can back out of the deal... Because there is no deal!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
1 vote
De Vonte Wil…, Agent, East Point, GA
Wed Oct 16, 2013
Hello tinafaye,

I am so sorry you are not having a pleasant experience in your home buying process. First and foremost, the taking of earnest money deposit when writing an offer with a realtor has been gone for years WITHIN THE STATE OF NEW YORK. Do you have an Agent of your own, or is there only one Agent involved, (the listing agent)? If you do not have written and fully executed "Exclusive Right to Represent" with a Real Estate Agent, the Agent does not work for you, but the Seller. That is how it works in New York State. This concept is confusing to most consumers, but is reality. If you want full representation, you need to have that agreement executed with an Agent of your liking/choice.

In regards to the seller backing out after a home inspection and accepting another offer, I would suggest that you contact your real estate attorney to see if you can get the home inspection fee paid, however, it is not a guarantee.

Legally, the listing Agent has to present all offers up to closing, and if there is another offer that comes in that the owner prefers, they have the right to take that offer, but your situation is unique, being that you were first in line and had an accepted offer, and your Agent should have been informed that there was another offer that came in.

Again, I am not an attorney and cannot give you legal advice, but I would strongly recommend that you seek the advice of competent real estate counsel, in an effort to get your inspection fee returned to you.

Good Luck To You, and Your Real Estate Ventures!

I hope this answered your question! If you have any further questions, please feel free to contact me by the ways below.

Wishing you all the best,

De Vonte Williamson , LSA
Experience The Williamson Difference
Proudly Serving Long Island
Top Relocation Associate, 2012
"I Stand Behind Getting You Results!"
1 vote
Shanna Rogers, Agent, Murrieta, CA
Wed Oct 16, 2013
Hi tinafaye,

First Question: Yes, it is common to submit an earnest money deposit check with an offer. If the contract is never executed/signed by all parties then you should get your check back - the seller cannot keep it.

Second Question: Home Inspection should be done after you have a legally binding contract - once all parties have signed the contract. Why would you pay for an inspection when you don't even have a contract and aren't even sure if you're going to purchase the property?

Third Question: A real estate contract has to be signed by all parties to be legally binding - it cannot be verbal. So, if all parties did not sign the contract, it's not an accepted offer and therefore there is nothing for the seller to back out of since there is no legally binding contract. As for what remedy you can get for the expensed you paid, there may be none - you may want to consult an Attorney.

Fourth Question: It doesn't sound like you had an accepted offer - it doesn't sound like all parties signed the contract. If all parties did sign the contract, you need to read the contract to see what is 'allowed' for cancelling contract.

Last Question: You should contact the Real Estate Board of New York.

Shanna Rogers
SR Realty
1 vote
Christopher…, Agent, Tarrytown, NY
Wed Oct 16, 2013
Hi, NY is a buyer beware state and that is why a home inspection is done prior to signing contracts. You want to make sure there are no deal breaking issues for you. As for the money, it happens all the time and the seller is not obligated to return the inspection money. You should definitely have a buyers agent representing you. I'm not a fan of dual agency because you cannot properly represent to opposing parties and have both of their best interest in mind. The seller and you can back out anytime before contracts are fully executed. Treat this as a learning experience and I bet your next attempt will be more successful.


Christopher Pagli
Accredited Buyer Representative
Licensed Associate Broker
William Raveis Legends Realty group
914 406 9023
1 vote
Gail Gladsto…, Agent, 11743, NY
Wed Oct 16, 2013
Only a signed contract carries any weight. An Accepted offer is not a contract. It is unfortunate. The listing agent in my opinion, should have called for best and final offers if they have received a better offer.

Ask your Realtor to inquire if the accepted offer was from the listing agent's buyer.

I am sorry that you had to go through this. I will bet a better house is waiting for you and this turns out to be the best thing that could have ever happened to you.
1 vote
tinafaye, Home Buyer, Queens, NY
Wed Oct 16, 2013
My fourth question is : is there a way to avoid a seller backing out accepted offer after home inspection is done?

My last question is : is my agent's conduct ethical? How and who can I file complains to?

Thank you very much. I feel so upset about losing the inspection money.
0 votes
You should consult with an attorney who is knowledgeable about the fiduciary responsibility of Real Estate Agents/Brokers. The Dept of State frowns upon agents misleading customers who are led to believe that they have rights which do not exist.
Flag Sun Oct 20, 2013
The agent didn't technically do anything wrong, you don't have a leg to stand on. Try to find a buyer's agent or at least work with an agent that can educate you on the process. You have excellent questions but no guidance.
Flag Wed Oct 16, 2013
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