Can a Seller back out if agreement is already signed but hasn't entered escrow yet?

Asked by Abby, Walnut, CA Sat Aug 15, 2009

My parents recently put their house up for sale, and just signed a contract of agreement with a particular buyer who wasn't making it easy on them. But now, they've changed their mind about selling (they miscalculated the finances, and it doesn't make sense for them to sell the house now). Is there any way to legally back out of the contract if they haven't entered into escrow (but signed the agreements already)?

Help the community by answering this question:

+ web reference
Web reference:


Fred Griffin, , Tallahassee, FL
Sat Aug 15, 2009
Parents need to see a Real Estate Attorney, immediately.

A Real Estate Agent cannot give legal advice regarding "Backing out of the Contract".

Again, see a Real Estate Attorney for Legal Advice.
1 vote
Centermac Re…, Agent, Fremont, CA
Sat Aug 11, 2012

Usually seller's miscalculation of their finances is not a legal ground to back out of the binding contract even if no escrow has been opened. Opening escrow is required performance of the contract. There are ways to cancel this if buyer fails to perform his obligations in a timely fashion beyond that there is really no legal excuse to cancel the agreement.
0 votes
Abby, Home Seller, Walnut, CA
Mon Aug 17, 2009
Thanks everyone who responded! Looks like they'll need to contact an attorney, but they might get lucky. Apparently the buyers want a lot of changes and fixes that were taken into consideration when my parents dropped the price of the house. So i'm guessing if my parents refuse, then the deal might be off, depending on the buyers' response? I'm still having them contact an attorney just in case, however. Is there anything they need to be concerned about?
0 votes
Tammy Davis, Agent, Hollister, CA
Sun Aug 16, 2009
A contract is a legally binding agreement and your parents could be sued for failure to perform along with any damages that the buyer could suffer.
Like everyone a good Real Estate Attorney immediately. Sometimes they can find the flaw in the agreement that could give them a way out.

Good luck ~
Web Reference:
0 votes
Abe Mills, Agent, Greenville, SC
Sat Aug 15, 2009
They need to contact their attorney immediately. I have had this happen to me, and luckily the sellers were really easy going and let the guy walk, but there could be some legal ramifications so they should get to the attorneys immediately. Here in South Carolina, a contract is not binding unless a meaningful deposit is rendered.

Good Luck!
0 votes
Pp Bb, Agent, Pomona, CA
Sat Aug 15, 2009
Have your parents contact their agent ASAP. The sooner the better. Then there will be less damages to have to pay if any, before the buyer starts hiring inspectors etc...If there agent isn't any help go straight to the agents broker that they work for. Hope this helps...
0 votes
Mike Lewis, Agent, San Diego, CA
Sat Aug 15, 2009
Abby, without knowing all the fact of your parents’ situation I can't answer that 100% accurately. What I do know is that once all the parties’ sign you are in contract and it doesn't matter if escrow has been opened or not. Your parents really need to be discussing this with their Realtor. Good Luck.
0 votes
Search Advice
Ask our community a question
Home Buying in Walnut Zip Codes

Email me when…

Learn more