Why I Let Our Seller Back Out—Right Before We Closed

There are a multitude of reasons why people don’t make it to move-in day after an offer is accepted: Your financing doesn’t go through, inspections uncover major issues, or you don’t move quickly enough. But one issue you usually don’t hear about? The seller backing out.

“It is very rare for the seller to back out of the sale,” says Alex Lehr, proprietor of Lehr Real Estate in San Carlos, California. “Unfortunately in real estate, regardless of what may morally be the right thing to do, it all comes down to WDTCS… ‘What does the contract say?'” Lehr says. If there are no exit clauses for the seller, then arguably, the buyer has every right to force the sale.

Though this is rare—it does happen. Curious as to how I know that? Because this is one of those “it happened to me stories.” Yes, I had to walk away from my “dream” home because the seller asked us if he could back out. And like Lehr says—it was all up to me and my husband to say yes or no. Though it sounds like the seller was just being flighty, it’s more complicated than that, so let’s start at the beginning.

Like any HGTV-devotee, my husband and I made a list of all of the things our dream house would have. We created two columns: One that held non-negotiable items like central air and a dishwasher, and one with nice-to-have-but-not-mandatory things, like a large front porch and sidewalks that our two young daughters could use to walk to school. Once we actually began house hunting, and saw what the market had to offer, we changed our list to more accurately represent the climate we were shopping in—we settled for wanting a house with good bones that we could eventually make our own. After falling in love with a completely perfect, remodeled Victorian in a full-on flood zone, we found a solidly-lovable Colonial on a tree-lined street a little further out than we had hoped for. Little did I know, this pivot from “dream” to “reality” would recur more than once in our home-buying process.

But we entered into one more dream sequence: Even though this $160,000 home was out of our price range due to a high tax bill, the owner was accepting all offers, so imagine my surprise when—the morning after we put in our low-ball offer—our agent called, letting us know our bid was accepted. I cried happy tears in my husband’s arms, as a lifetime of plans took shape in my mind. Over the next few days I was almost too busy to think. There were inspections to schedule and appraisals to set up. I had to compare insurance quotes and get information on whether an out-of-state move would increase our auto rates. All the while I daydreamed about the kind of rocking chairs we would put on our front porch.

But then the harsh reality hit. The morning of our appraisal I received an email from the seller’s attorney. The seller was just diagnosed with an aggressive form of cancer. His new home, where he was already living, was located in rural Wyoming. His doctor had informed him that his best chance at survival would be back in New Jersey (where we were buying)—close to a large city with easier access to doctors and specialists.

The email went on to state that the seller would completely understand if we said no, but he asked to be let out of the contract so that he could move home to begin treatment. I read the email a few times and then called my agent to verify it wasn’t some sort of a hoax or mix-up.

Though we were in our legal right to force the seller to carry out the sale, we would do no such thing. “Obviously we’re going to let him out of the contract,” I told our agent, while fighting back tears. I called my husband, and then my parents. Nobody could believe it. I felt blindsided.

I cried over that house for a week before before my mother said something to me that changed my perspective. We didn’t lose our dream house. We made the decision to walk away, and we were unbelievably fortunate to be able to do so. We weren’t tied up with the sale of another property.

Though I hope you’re never in this position, here’s what to do to make sure you are fairly compensated. Lehr recommends calculating the opportunity cost of the situation, or how much money you have put in the process, as well as an estimate of how much you can be fairly compensated for time lost and whether you’re effectively losing money/opportunity by not being able to have the house. For example, if you’re buying in San Jose—the hottest housing market in the U.S. where inventory is very tight, it will cost more for a buyer to secure another home than in a place like New Orleans, Louisiana, where inventory outweighs buyer demand.

Though we probably could have asked for more money, we were happy to walk away with just a refunded deposit and empathy for the seller. We were able to do the original owner a kindness during what had to be a very scary and painful time for him.

It’s been over a year since I received that email from my agent. I still check from time to time to see if the listing has gone back up. Not that we’d make an offer again (it’s actually pretty common for people who pull out of a sale to later put the house back on the market)—we eventually found another home to purchase—but I wonder how he’s doing. I wonder if the treatment was successful and he was able to move back to his dream home in Wyoming. I also wonder about the life we would have had in that house, and how it compares to the one we have here where we ended up. I believe that everything happened for a reason and we were meant to be here, but I do still miss our dream house.