The Seller Won’t Sell

Options for Buyers When a Seller Changes Their Mind

Credit: Andrea Piacquadio / Pexels

Q:  Marsha, I am due to close escrow on my dream home in seven days. Suddenly, the sellers have declared they no longer want to sell. They want to refund my deposit. I don’t want the money; I want my house and I want them to leave. Both agents are frustrated and angry. What is my recourse? 

A:  Fortunately, this is not a frequent occurrence. You don’t mention why the sellers want to cancel. In many cases, sellers have a momentary panic and want to cancel a sale. Once they seriously consider it, they will move forward. 

I speak from experience in this matter. My husband and I were in the process of purchasing our first home in June 1990. The home had been a rental for many years and was a true fixer. We opened escrow on June 26, 1990. The Painted Cave Fire started the next day on June 27. The winds were fueling this ferocious fire, and the flames quickly reached Santa Barbara. The sellers lived off North Turnpike and were concerned their house wouldn’t survive. They called their agent on June 28 and asked to cancel escrow, thinking they could move into their rental if their home burned. We told the sellers’ agent to have her clients sleep on this action and we would talk in a couple of days. The sellers decided to move forward with the sale. Sadly, along with 427 other structures, their home was lost in the Painted Cave fire. 

Once sellers go into a real estate contract, the power in the transaction shifts to the buyers. The buyers have a set of contingencies to complete within a specific time frame. Sellers have no recourse but to wait on the buyers to remove their contingencies. Only when the buyers fail to perform within the contract’s timeframes can the sellers move to cancel the contract. 


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If all the contingencies have been removed and buyers decide to cancel the contract, their security deposit, generally 3 percent of the contract price, is at risk. The seller has been harmed by the buyers backing out at the last minute.

The buyers are likewise harmed by sellers who attempt to cancel the contract at the last minute. While the sellers have no actual money in escrow, they can expect to be sued for specific performance by the buyers, the buyers’ broker, and the sellers’ own broker. Everyone fulfilled their obligations, and the sellers are causing serious harm and acting in bad faith by canceling. 

The buyers have several options. They can sue to force the sellers to complete the sale. If the sellers have no legitimate reason for backing out, the buyers will ultimately win in court. The buyers can also record a lis pendens on the property, letting the world know there is a lawsuit taking place and the property can’t be sold. If the sellers are reneging on the contract to obtain more money in another sale, the lis pendens will halt that sale.

The good news for you is that often it simply takes a little time for sellers to recognize that moving forward with the sale is far better than the alternative. Give them a few days. I hope they make the right choice.


Marsha Gray has worked in Santa Barbara real estate for more than 25 years. She works at Allyn & Associates, where she helps her clients buy and sell homes and with lending services. To read more of Marsha’s Q&A articles, visit MarshaGraySBhomes.com. Contact Marsha at (805) 252-7093 or MarshaGraySB@gmail.com. DRE# 012102130; NMLS #1982164.


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