Can seller back out of contract?

Asked by Rinh, Denver, CO Wed Jun 25, 2008

Hello,

I recently went under contract to purchase a home and finished a home inspection on the house when the selling agent called to say that the deal was dead. He told my agent that the selling party will fire him and the sellers believed they were pressured into the purchase. We made our offer on 6/21 (rejected), new offer on 6/22 with a verbal agreement, than signed contract on 6/23 with our house inspection on 6/24. The inspection deadline was 6/30. My agent said it was a scummy move but legal. So now I'm out $550 and no house. Is there anything I can do to recoup my $550? I'm so angry now and can't think straight.

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10
Joetta Fort, , Arvada, CO
Wed Jun 25, 2008
Asking your agent to explain doesn't cost anything. If they said it's legal, they should be able to tell you why they think it's legal. If you do ask your agent on what grounds the seller had the right to back out, please let us know - or at least me. I'm very curious.

Thanks!
1 vote
Chuck Strau…, Agent, Denver, CO
Wed Jun 25, 2008
To add one more voice to this answer: consult an attorney. Some realtors are also attorneys, but if not, we can't offer legal advice.
1 vote
Jenny Lane, Other Pro, Superior, CO
Wed Jun 25, 2008
Hi Rinh,

It's difficult to say since there are many variables involved and each contract is different as far as specifics, but the short answer is that you really need to consult a lawyer. Make sure to re-read the contract you signed as well, especially regarding sections 21 and 22. But as was stated below, real estate agents cannot give legal advice so do make sure that your agent does not and he/she should also be suggesting you consult legal advice as soon as possible. Best of luck to you.
1 vote
Cameron Piper, Agent, Forest Lake, MN
Wed Jun 25, 2008
Rinh,

You need to talk to an attorney if you want to attempt to recover your $550. I know that isn't the answer that you want becuase attoney's aren't free, but as real estate agent we are not licensed to be able to give legal advice. At the very least I would have your agent talk to his company's legal department or his broker to get their opinion. My gut says that if the agent says its legal it most likely is. I hope that helps
Web Reference:  http://www.campiper.com
1 vote
Bill Fung, Agent, Centennial, CO
Thu Jun 26, 2008
Rinh if your agent used the following forms for your offer contract titled as CBS -1 8-07 Mandatory 1-08

Then the following sections address the situation you are in.
Sec 10.2 or approximately line 295 Inspection objection deadline
Sec 10.3 or approximately line 303 Inspecton resolution deadline
Sec 21.2 or approximately line 442 If Seller is in default
Sec 30 or approximately line 487 Notice delivery and choice of law

Not knowing all the circumstances of the transaction, other parts of the contract may also come into play. Based on the details you have supplied, it sounds you have a case more in favor of you than the seller.

Also Bill Kosena’s 2 responses are very accurate, detailed and succinct beginning with

Hi Rinh,

The sellers do not have any options to back out of the Colorado contract and

All may not be lost! (explore the following points with your own attorney - let me know if you need the names of a few good real estate attornies.)

Rinh wishing you the best outcome, and if you are inclined, please let us all know how this transaction turns out.

Bill
Web Reference:  http://www.homesellteam.com
0 votes
Chuck Strau…, Agent, Denver, CO
Wed Jun 25, 2008
Rinh:
Best of luck, you should have been in a good position to get this to closing, and I sincerely hope that it all works out for you.
0 votes
Rinh, Home Buyer, Denver, CO
Wed Jun 25, 2008
Thanks for the responses. I moved fast on the request of the seller. The house is vacant and they wanted a fast closing. I also wanted to have a roofing, plumbing contractor check a few places before we submit our inspection (house is 75 yrs old).

My agent mentioned that if the sellers didn't back out now they could after the inspection (not sure how because we were happy with the findings) or during the title work. They didn't want to use our title company and wanted us to change to theirs. My agent is currently talking with his broker about the contract.

I'm just so angry since we did everything to accommodate the sellers. We could've closed this transaction in less than 4 weeks.
0 votes
Alan May, Agent, Evanston, IL
Wed Jun 25, 2008
Without a lot more information, it would be impossible for any of us to give you a decent opinion of whether or not they had the right to back out of the contract. But even if we had that insight, as many before me have said, we're not allowed to offer "legal advice" and my official advice is to consult a real estate attorney.

I understand your anger at having spent the time, energy and money in an inspection, and to have gotten your heart into the deal... but sometimes it's best to take a step back, and look at the bigger picture. Getting an attorney involved, and pursuing the return of your $550.00 will likely cost you as much, if not more, than you stand to recover AND there is no guarantee that you will recover the money, so you may be throwing good money after bad.

Additionally, while it's aggravating to think about having lost the $550.00, it will be even more stomach-churning to relive the insult, each and every time you talk to the attorney, or if you actually get into a mediation. These things have a way of coloring your mood, and ruining your day/week/month/year.

Sometimes it's better to learn from it, and move on. I know that's not what you want to hear, but if you allow a little time to pass, I think you'll be able to find the logic, past the emotion.
0 votes
Angela Jensen, Agent, Coral Springs, FL
Wed Jun 25, 2008
You arranged for your inspection the next day after you had the executed contract. Maybe if you had waited a couple or three days after, you would have gotten some indication that the Seller was changing his/her mind about selling and that would have saved you $550. Was there a reason why you did your inspection so quickly? Moving so fast must have given the Seller second thought about the transaction. If your agent said it was legal, then it probably is. Better luck on your next transaction. Don't give up!
Web Reference:  http://www.AngelaJensen.com
0 votes
Joetta Fort, , Arvada, CO
Wed Jun 25, 2008
I would ask your agent to show you where, in the contract you signed, it says the seller has the right to change their mind. If you executed an Inspection Notice (meaning that you notified the seller you wanted some things repaired, etc.), the seller certainly has the right to refuse. Then, if the issues that you notified them of aren't resolved by the inspection deadline - which is still several days from now - the contract terminates automatically.

However, you also have the right to withdraw the Notice to Correct and proceed with the contract. That's the buyer's option, not the seller's. It's paragraph D in the Notice to Correct.

True, we're not supposed to give legal advice, and there may be some detail I'm not aware of, but read your contract, and your agent should be able to show you where it says the seller has this right, if they do.

If all you want is your money back, and move on to another property, you probably would have to take that to court.
0 votes
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