Can the seller cancel escrow just because he changes his mind?

Asked by Bunny, Los Angeles, CA Thu May 24, 2012

As seller's agent told me that the seller has some issues with family for selling the house and decided to cancel the escrow. He claim he has the right to cancel it within 7 days after acceptance of offer. Is it ture?

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Tim Jarnot, Agent, Los Angeles, CA
Fri May 25, 2012
You need an attorney and you need one NOW.

This is a contract issue and unless there is a specific clause in the contract allowing the escrow to be cancelled unilaterally by the Seller (and there very rarely is) you have the right to proceed forward and close the deal.

If the seller refuses to cooperate an attorney will file suit for Specific Performance to force the seller to comply with the Purchase Contract. If this is a property you want then you need to get active immediately becuase any delay can only harm your cause and make it easier for the seller to "wiggle out" or press you past your contingency periods to a place where you cannot comply with the contract yourself.

It is vitally important that you proceed forward with inspections, appraisal, and any other activities associated with Closing the transaction on your end. You MUST be ready, wiling, and able to close as per the Purchase Contract in order to force the seller to comply also.

Again, it is important that you consult with an experienced real estate attormney as soon as possible. If you need a referral to such an attorney, I can provide one.

Tim Jarnot – Broker
Westline Properties
DRE # 01274482
Direct: (310) 795-7807
1 vote
Stephanie Ha…, Agent, Torrance, CA
Mon May 28, 2012
If the purchase agreement has sellers contingencies then, yes (contingent upon purchasing another property, for example).
That rarely happens... So most likely the answer is no.
Hope that helps!
Stephanie Hart
Forecast Realty
CA DRE 01338444
0 votes
John Arendsen, Agent, Leucadia, CA
Sat May 26, 2012
Generally not without paying the price which is could be staggering if you've packaged the deal properly.
0 votes
Judith Gotte…, Agent, Los Angeles, CA
Sat May 26, 2012
Hi Bunny,

If you are under contract with the CAR Purchase Agreement with no alterations or addenda changing terms, no. The buyer has that right (the number of days is determined by the purchase agreement), but not the seller. The seller can only cancel for non-performance by the buyer. However, the seller can stop performing on his end and put you in a position of not being able to move forward. Then you have a seller in breach of contract. And then you have legal action to make the seller perform.

Good luck!
Judith Gottesfeld
Gibson International
Web Reference:
0 votes
So if there are multiple addenda (5) made to the CAR Purchase Agreement including a change in finance terms (an all cash offer changing to a private loan), can a seller legally cancel Escrow?
Flag Mon Mar 25, 2013
Neal Grusky, Agent, Los Angeles, CA
Thu May 24, 2012
Without any long drawn out explanation simply, "no".

Neal Grusky
DRE# 01890580
Hpremiere Properties
Real Estate and Financing
10940 Wilshire Blvd. Suite 1600,
LA, CA 90024 | Office:
(800) 652-1768
| Fax: (800) 652-7604
0 votes
Douglas Perez, Agent, Los Angeles, CA
Thu May 24, 2012
Hey Bunny,
You must read and understand your contract before signing. One of the most common purchase contract, it's CAR form as mentioned below, but whether or not this claim is true, it must be in your contract.
Many buyers make a mistake to rely on the agent or agents involved without knowing who represent who and for what.
If you're a first time buyer, you must get agent (or real estate attorney in some cases) who represent, protect, educate, guide, and explain you through process of purchasing your first real estate purchase or investment.

Best of luck!

Douglas Perez
(213) 375-8741
0 votes
Kathleen Bec…, Agent, Santa Monica, CA
Thu May 24, 2012
Hi Bunny:

Refer back to your purchase must be by signed mutual agreement. Contact a real estate attorney for advise.

Good luck!

All the best,

0 votes
Sona Gallatin, Agent, Santa Clarita, CA
Thu May 24, 2012
Hi Bunny,
Did you use a Califorina Residential Purchase Agreement? Hopefully so and hopefully you had your own agent represent you. If the conditions discribed on Page 5, paragraph 14, section C existed, if not call an attorney.
0 votes
Shannon Chang, Agent, Arcadia, CA
Thu May 24, 2012
Under the standard California Association of Realtors (C.A.R.) contract, seller can never cancel escrow.
Did you use your own agent or did you use Seller's Agent? If so, agent may not be properly representing you and I suggest getting an attorney involved.
What kind of contract to purchase did you sign? If not a standard CAR form contract, then you need to read it, it may have an unusual provision allowing Seller to cancel.
0 votes
John Barry, Agent, Eagle Rock, VA
Thu May 24, 2012
Hi Bunny,

Without looking at the terms of your contract, it is hard to say for certain as that clause could be written into your agreement. Generally speaking, though, according to the standard terms of the C.A.R. Contract, the seller does not have the right to cancel within 7 days of acceptance just because they change their mind. There are only certain conditions in which the seller can cancel the contract, and most involve the buyers non-performance. Hope this helps. Good luck!

John Barry
DRE #01856079
Coldwell Banker Residental Brokerage
Phone: 323-810-7976
0 votes
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