Can a home buyer change their mind after all parties have signed?

Asked by RRichards, Los Angeles, CA Wed Mar 26, 2008

A buyer asked to buy our home that was not on the market. We accepted the offer, signed all purchase agreements and their were no contingencies as he was already approved for his home loan. We received a copy of the loan approval and agreed upon a down payment. A week later the buyer asked to change deal and have us carry back more than we agreed to, we said no. We made financial decisions based on this sale, including not taking a refinance loan. The next week I called to verify escrow as non refundable deposits where supposed to be in. I was informed the agent was holding buyers check, no escrow was opened and no funds to cover check. Buyer and agent were confronted and we were asked to excuse buyers actions . We lost our refinance and have to start over. Are there any repercussions for the buyer or the agent? Buyer has a large trust fund and hated getting caught, agent says she was tricked too. Not true, she asked escrow to hold check. Can they do this to us?

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Keith Sorem, Agent, Glendale, CA
Thu Mar 27, 2008
Assuming that your buyer's Realtor used CAR forms, the RPA has several contingencies. You state that there were "NO CONTINGENCIES". If that was true, that includes loan approval, property appraisal, physical inspection, Natural Hazard Disclosure, Earthquake Disclosure, LA City inspection, wood destroying pest inspection, etc. So there is no remaining contingency, expect the three day walk through. Assuming that you gave the buyer the aforementioned reports. Each time the buyer receives a new disclosure the three day recission period kicks in.

So aside from a 3% deposit, normally the buyer has to make an additional deposit to close. So AFTER ALL contingencies were removed, he did not want to or was unable to come up with the additional deposit. Those deposits can be either during escrow (say a week after contingencies are removed, so they become part of liquidated damages), or PRIOR to the close of escrow, which means they are NOT part of liquidated damages.

I am not your agent and do not know all the facts, however it appears to me that you might want to consider a couple of things:
Without knowing the facts and seeing the paperwork, in general the buyer has numerous options to "get out" of a transaction. The contracts are "buyer friendly".
You mention that you called escrow only to find out that it never opened and the check was never deposited. With a competent Realtor representing YOUR interests, coupled with effective escrow company, that "surprise" would not happen.

So, yes, see an attorney. Also, I read your profile and you are no doubt very good at investing in properties. Don't you think it would be to your benefit to have a competent Realtor represent you in your transactions. In most transactions I believe a Realtor MORE than earns their fee by saving their clients money, stress, disappointment, and avoiding legal entanglements.
0 votes
Kim Van Dyk, , Granada Hills, CA
Thu Mar 27, 2008
It would be advisable to seek the advice of an REAL ESTATE attorney, also you may wish to file a grievance at the Assocaiton of Realtors the agent is associated with and they will determine if the agent vialated the Code of ethics.
1 vote
Fe Tayo, , 07731
Thu Mar 27, 2008
Dear Ms. Richards,

It is wise to seek legal advise. It's worth a try, buyer can backed out but with reasonable cause like death of the spouse or bankruptcy and some other reasons that both of you might find reasonable.

I wish you all the best.
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1 vote
Simon, , Atlanta, GA
Thu Mar 27, 2008
More specifically, you should speak to a real estate litigator. You can use which will provide a list of attorneys in your geographical area.

Best of luck
1 vote
Laarni G. Om…, , Orange County, CA
Thu Mar 27, 2008
Ms. Richards,
I think you need a real estate lawyer for this. Please consider the time,effort and money that you need to put in this if you want to pursue this matter. I wish you all the best.
1 vote
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