Return to the Buying and Selling Homes Forum | Post a Follow-Up

 o
can sellers get cold feet and back out?

Posted by purrus (My Page) on
Thu, Jul 23, 09 at 11:55

We are dealing with somewhat crazy sellers--it's three sisters selling their childhood home, so there are a lot of emotions at play. I guess one of the sisters has remorse for selling to us because they think they should have gotten a lot more for the house (NOT true--it needs a new furnace, new roof, all new cosmetic updating, etc, to even begin to approach a higher price...in fact, I think we paid more for the house than it was really worth, but it's been a long, rough housebuying ride and we love this place). This one sister said some obnoxious things to her agent, who passed them on to our realtor who in turn told us.

We are a week from closing EXACTLY--as in, we will either just be finishing or in the middle of it all exactly one week from right now.

Can they back out? I just need to know whether to be afraid. I'm not sure why their realtor told ours about this, except that she seems to like drama. ;)


Follow-Up Postings:

 o
RE: can sellers get cold feet and back out?

Once you have a signed contract, the sellers can't back out because they don't like the price. Of course, that "can't" carries a similar weight to the idea that you "can't" go above the speed limit while driving. It doesn't mean you cannot physically do it, just that there may be legal/financial consequences if you try to.

The bottom line is that until the papers are signed, anything and everything could go wrong. Most of the time though, the seller is going to have a decent agent/lawyer who will advise them that they need to follow the contract or they expose themselves to lawsuits and lengthy battles. A small fraction of people are so bull-headed that they will ignore that advice. Since you have 3 sellers, you have 3 times the normal chance of encountering one of those "fun" people. Of course, 3 times a very small chance is still a very small chance, but you just never know.


 o
RE: can sellers get cold feet and back out?

They can balk at closing, and it will cost them. Unfortunately, it will cost you, too -- time and money. Are any or all of these ladies occupying the house? (They could refuse to move out.)


 o
RE: can sellers get cold feet and back out?

None of them are living there--it's an estate. There's still lots of stuff in there, but they've been there every day clearing it out.

I am a little afraid of them doing something to the property--we haven't done a single thing to them; we're just people buying a house, but they resent our existence. They don't want to let go of the property.


 o
RE: can sellers get cold feet and back out?

It certainly wouldn't be in their best interest to damage the property but if this is your concern make sure you have a walk through right before closing. And make sure the house is empty when you do it! After closing it will be increasing hard to have them clear it out, especially if they have already taken the things that have value to them.

Barbara


 o
RE: can sellers get cold feet and back out?

If they balk at closing go directly to your attorney.

You can record a lis pendens against the property, and then put them on notice you will sue for specific performance and legal costs.


 o
RE: can sellers get cold feet and back out?

sounds like the heirship disease, complicated by sisterhood!

Yes, sellers can have "seller's remorse", but they aren't likely to actually back out;
if any of them tries, her/their attorney would almost certainly tell her/them to prepare to lose the argument & likely a great deal of money.

You might want to close first to dodge any dramatics;

I once had an heir sob out loud at the closing table, squalling about how emotional he was about his mother's house...

which he never had visited before her death & which he never had cleaned or repaired for her while she was alive or for market after she died...

The closer passed him the kleenex, his wife patted his back, & we all waited.

Next, he said that his mother would have wanted him to have more money & that he *would* have had more money if he hadn't had to pay *her* (me).

Well, he'd have had more money if he'd paid the last 4 years' property taxes!

(I had already cut my fee to get this draining experience out of my life.)

Finally, his wife said, "Well, honey, we'll know better next time, won't we?"

& he heaved a big teary sigh & signed.


 o
RE: can sellers get cold feet and back out?

This same thing happened to us. We had a contract & closing date. Sellers changed their mind & said they wanted to stay - even though they had already moved out. We always suspected they got a higher offer. We said that we would not let them out of the contract & they honored it.

Not without some grief. They took every appliance manual, house plan, receipt for service, etc. that they were going to leave. Also when we got around to hooking up the satellite service, we found that they had cut all of the cables in the attic. Could have been worse, but still annoying.

Part of our problem was that we already had a contract on our old house so staying in it was not an option. We would have had to rent an apartment, look for a place & move twice. Not to mention there was NOTHING on the market we were interested in at that time & we knew it.


 o
RE: can sellers get cold feet and back out?

That happened to an acquaintance of mine. She and her husband went to the closing and the seller never showed up, never answered the phone, wouldn't answer the door. Since their furniture was in the van, they had to store it and move into her brother's basement until another house was found.

They sued seller for expenses and if I remember correctly, they won, but they certainly didn't get that much money.


 o
RE: can sellers get cold feet and back out?

The seller changed his mind on me and did not show up at the closing causing me to have the worse year fighting him and losing so much money despite getting him to move by the end of the year (months later).


 o
RE: can sellers get cold feet and back out?

Luckily with ours, we had a great realtor on our side that gave great advice. The seller consulted an attorney and then we got a letter from that attorney stating that the sellers "intend to fully comply".

Funny, but when I mentioned this post to DH, he reminded me that the sellers tried to back out on the very first house we bought too. I had forgotten. That time, the realtor was representing both parties (I know, I know) and told the seller that we would probably sue if they backed out, so they went ahead. She was right!


 o
RE: can sellers get cold feet and back out?

Our sellers tried to back out too! They got a slightly better offer the same day they accepted our and tried to get us to agree that, but we refused. Somehow in the end the realtors (different realtors, but same company) ended up paying the sellers $1000 to go forward with the sale.

When all the drama was going on our lawyer told us that we cannot make someone sell us their house (even though we had a contract). I acknowledged the truth of that, but said that I would hold them responsible for the costs associated with the weeks we spent living in a hotel while waiting for the closing. After that, we never heard another word about them backing out.


 o
RE: can sellers get cold feet and back out?

Wow, more stories here than I would have thought. Purrus - maybe your realtor can get a read on these women from their realtor, pass on your concern so you can....be prepared, maybe with a lawyer.


 o
RE: can sellers get cold feet and back out?

Also, don't forget to change the locks right away after the final walk-thru.


 o
RE: can sellers get cold feet and back out?

Of course sellers can back out. You can't force someone to show up at a closing, no matter how good your contract is. It happened to me.

And if your seller changes their mind and decides not the honor the contract, good luck suing for "specific performance". Our lawyer advised us that even if we got a judgment in our favor, there's no guarantee we'd ever see any of the money.

We (unknowingly) were buying from a divorcing couple. After two scheduled closings came and went, we contacted both sellers directly and met with them a few times. They eventually came around, after six months.


 o
RE: can sellers get cold feet and back out?

To clarify:
change the locks immediately after the sale has closed & funded, not before.


 o
RE: can sellers get cold feet and back out?

Ok, well, now I am officially nervous!

We are supposed to close this Thursday, assuming the mortgage people really have everything together by then...we don't have the final "clear to close" yet and are sweating bullets that they will delay closing by a day or two, and that the sellers will walk as a result!

At least it's just one nutty sister (from what we can tell) and not all three that feel this way. Hopefully majority rules...


 o
RE: can sellers get cold feet and back out?

Can sellers walk because closing is delayed by a day or two, due to no fault of the buyer's? I don't remember having anything about this in the contract, so I am not sure whether the ball would be back in their court at that pointl

Our financing is fine; the issue has something to do with a comparable that changed that the underwriters want the appraiser to "comment upon." That sounds really weird to me, and somewhat silly, but we worry it will delay closing, which is supposed to happen Thursday.

SIGH. I just want this to be over!


 o
RE: can sellers get cold feet and back out?

"Can sellers walk because closing is delayed by a day or two, due to no fault of the buyer's?"

If the seller caused the delay it would likely be breech of contract.

Delays caused by the buyers agents (including lenders, inspectors, etc) fall at the buyers feet, so you need to carefully consider what you mean by "no fault of the buyer's."


 o
RE: can sellers get cold feet and back out?

We recently bought a home and, during closing the seller's agent started telling us that we "almost lost" the home because we were late in complying with a contingency - well in advance of closing the seller hand demanded from our bank a document that is prepared by the underwriters, in this bank's practice a day or two before closing. They accepted the reassurance of our lender about the loan's going through, along with the lender's instructing them that the document they wanted simply would not and could not be provided. But apparently the real estate agent convinced herself that this gave the seller a potential "out".

Had the seller tried to make an issue of this, though, we could have taken them to court where, in my opinion, we would have prevailed on the triple ground that we had substantially complied with the requirement, the supposed breach was not material (form over substance), and impossibility. We could have filed a lawsuit for specific performance (compelling them to sell us the house) and filed lis pendens (formal notice of the lawsuit, right in the chain of title) which would have effectively prevented them from selling the house until our lawsuit was resolved.

The difficulty is in deciding if that's worth it. I was not so in love with the house that I wouldn't have been prepared to walk away. If I sued for specific performance, it would likely have been with the goal of settling for my out-of-pocket losses - something a previous post mentioned can be tricky with individual sellers, but here the seller was an intermediary, a relocation company hired by the homeowner's new employer. (I have no sense that the relocation company itself ever considered trying to back out. We had, after all, made the highest offer.)

In short, the buyer is in a pretty powerful position in a real estate transaction. It's easy to include contingencies that the buyer can use as a basis to escape from the contract, with no recourse by the seller (think, e.g., 'passing' a contractor's inspection - where any decent inspector is able to find a problem the buyer can deem 'failure'). But if the buyer is willing to litigate, they can tie the property up in the court case and can likely delay the seller's ability to close a sale to somebody else for months, possibly a year or more, as litigation drags on. Most sellers won't want to absorb the cost of litigation, let alone the cost of owning the home during the time litigation drags on.

But a cost-benefit analysis is also required on the buyer's side - most buyers also won't want to tolerate the delay, or absorb the cost of litigation - so unless I thought there was something truly unique about the house (e.g., it's a Frank Lloyd Wright house, such that I'm not likely to find a house with a similar legacy) I would be apt to either walk away or to consider a suit seeking money damages (assuming I believed I could successfully collect that money from the seller).


 o
RE: can sellers get cold feet and back out?

Closing was set for Thursday;
did all go well?


 o
RE: can sellers get cold feet and back out?

Hi Sylviatexas,

Thanks for asking...unfortunately, since we're closing near the end of the month and so is everyone else, we're delayed. We haven't gotten the clear to close yet from the underwriters, who are swamped during this time of year and at the end of every month in particular. We are very frustrated but apparently, all sources tell us that the sellers are being "understanding." This is new for them, so I hope it is true, since it really isn't our fault...the underwriters have everything from us that they need and have been very positive, the paperwork has just piled up.

Will post an update when I can. Thanks....


 o
RE: can sellers get cold feet and back out?

"Can sellers walk because closing is delayed by a day or two, due to no fault of the buyer's?"

"If the seller caused the delay it would likely be breech of contract."

During the buying nightmare mentioned in my previous post, we were advised by our lawyer that closing delays are "customary", and that pushing a closing back by a week or so would most likely NOT be viewed as breech of contract by a judge. This was in response to my request that we initiate a lawsuit if the sellers postponed the second scheduled closing (which they did).


 o
RE: can sellers get cold feet and back out?

"During the buying nightmare mentioned in my previous post, we were advised by our lawyer that closing delays are "customary", and that pushing a closing back by a week or so would most likely NOT be viewed as breech of contract by a judge. This was in response to my request that we initiate a lawsuit if the sellers postponed the second scheduled closing (which they did)."

It depends on what you are seeking relief for.

If the seller is delaying to try and prevent the sale, it is very different than delays caused by closing companies, mortgage underwriting, etc.

If the remedy you sought was to force closing, the court is likely to take so long to act that the closing will have occurred unless the seller is trying to kill the entire sale.

If you want the sale to go through and are not alleging a breech of contract but want the contract enforced the judges response may be very different than if the seller is trying to void the contract since their actions caused the breech.


 o
RE: can sellers get cold feet and back out?

The seller was delaying to try and prevent the sale, so the remedy I sought was to be reimbursed for all of my expenses (inspection, rental housing if needed, legal fees). I didn't think it was realistic to sue to "force the sale"... we were advised that we would not be successful.

The delays weren't caused by the closing companies or mortgage underwriters. The seller was trying to kill the entire sale.

So basically we would have been suing for breech of contract. The legal term was "specific performance".

The seller didn't seem to give a hoot about voiding the contract, or their legal obligations or honoring the value of their word. They changed legal counsel three times during this process, so I guess they had trouble finding a lawyer who would tell them what they wanted to hear.


 o
RE: can sellers get cold feet and back out?

I am supposed to close escrow in few days and the seller decided to back out. his reason was too much capital gain taxes. I have done all my due diligence. I'm going to go after him, since this is a commercial property and so far I have spent about $10,000 on reports,etc and my two businesses were supposed to move there within next few months.

has anyone had any experience with commercial property?

The seller is so greedy that hasn't even offered me any compensation for my loss and he doesn't seem to care about lis pendens on his property. I need the building so urgently. Tomorrow meeting with an attorney.
Any advice will be appropriated.


 o Post a Follow-Up

Please Note: Only registered members are able to post messages to this forum.

    If you are a member, please log in.

    If you aren't yet a member, join now!


Return to the Buying and Selling Homes Forum

Information about Posting

  • You must be logged in to post a message. Once you are logged in, a posting window will appear at the bottom of the messages. If you are not a member, please register for an account.
  • Posting is a two-step process. Once you have composed your message, you will be taken to the preview page. You will then have a chance to review your post, make changes and upload photos.
  • After posting your message, you may need to refresh the forum page in order to see it.
  • Before posting copyrighted material, please read about Copyright and Fair Use.
  • We have a strict no-advertising policy!
  • If you would like to practice posting or uploading photos, please visit our Test forum.
  • If you need assistance, please Contact Us and we will be happy to help.


Learn more about in-text links on this page here