Legal Question in Real Estate Law in California
Seller backs out of sales agreement
We are sellers and signed a purchase agreement. Next day we looked at neighborhood homes and were startled to discover that we could not replace the home we were selling, feature for feature, for the price we were getting. It�s approximately 20-30% more to replace it. Home inventory is very low in this area and it will be extremely difficult to find a comparable replacement home. Our agent was instrumental determining the selling price, actually more than we had intended to list for. We feel that the broker was pricing the house for his own commission interest. He had a fiduciary duty to advise us of market conditions, the cost to replace with a comparable property, and availability of comparable properties. Being made aware of these facts, we definitely would have listed considerably higher or not listed until we purchased another home.
Less than 24 hours after we signed the agreement we informed our agent in person that we wanted to cancel the agreement. We sent follow up e-mail to our agent and buyer�s agent. We sent follow-up fax confirmation of our intent to cancel the next day, within 48 hours, to both agents. Escrow has not opened.
How do we get out of the deal? What are the legal and financial ramifications?
5 Answers from Attorneys
Re: Seller backs out of sales agreement
The issues of whether you must go through with the sale and whether your agent has some liability for misinforming you are largely separate.
The buyer may be able to force you to honor the sales contract by suit for specific performance. You may have defenses, but you are at risk, and should get competent legal advice by retaining counsel to study the contract for possible 'outs' at once. Preferably, find someone who practices in the county where the property is situated.
Separately, you may have a claim against your agent or broker for some kind of professional negligence for misinforming or incorrectly informing you of the value of your home. This would perhaps be difficult to prove, since the market is so crazy and even a reasonably careful agent could under-estimate a home's value. Agents and brokers are not appraisers. Still, if a really big mistake was made, you might be able to prove it in court through use of expert witness testimony.
All things considered, you should get a local attorney, then ask that attorney to try to negotiate your way out of this, including asking the agent or broker to cooperate on pain of suit. Your legal posture vis-a-vis the buyer is especially delicate and you may have to compromise in order to avoid being sued and perhaps losing.
Re: Seller backs out of sales agreement
We will have to review all contracts and writings to see if our firm can get you out of the contract. You may have a case against your broker depending upon the facts and research he or she did. Please contact our office for consultation and review of your documentation.
714 363 0220.
Re: Seller backs out of sales agreement
It sounds like you signed an agreement and you will have to honor it. If the agent breached a fiducial or other duty results in a direct claim against him/her. However, I suspect you will have to go through with the deal as to the innocent buyer. You may contact me, I am reasonably priced.
Re: Seller backs out of sales agreement
You need the agreement looked over carefully to determinw what your options might be.
Joel Selik
800-894-2889
Re: Seller backs out of sales agreement
You know, my position his bid somebody screws up they should take the blame for it. You screwed up. That your broker as your broker isn't responsible to give you the financial conditions of all the homes in the area. Unless you are moving into an area for the first time, for instance from out-of-state, in that case some financial conditions may have to be disclosed to you. In this situation, you should have done your homework. You of no one to blame but yourself. And depending upon how the contract reads you may not be able to get out of the contract. If you don't perform in good faith the seller to very possibly sue you for specific performance and damages. Buyer's remorse, wake up and smell the roses are no excuse. Under normal circumstances I would say something to the effect that I've been practicing real estate law for over 30 years and the like to consult with me, etc.. In this case I'm not volunteering my phone number.
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