Real Estate Problems: Seller Backs out after Escrow

In a real estate transaction, a buyer and seller agree to terms, and then the escrow process begins. Once a real estate transaction enters escrow, it is expected that both parties will complete the transaction. Sometimes a seller changes her mind after entering escrow and decides to back out of the transaction. The failure to complete the transaction can create problems for other parties besides the seller and buyer.

Commissions and Fees

Any real estate agent involved in the transaction expects to be paid a commission for his services. He will expect to be paid even if the transaction is not completed. Likewise, the escrow agent has performed a title search that needs to be paid for, as do his services in preparing documents for closing.

Inspections and Appraisals

The buyer may have incurred a cost for completing an inspection to determine the condition of the property. He may have paid for an appraisal to determine the value of the property if he is getting a mortgage. The buyer will want to be compensated for these costs.

Buyer Loses Property

A buyer may have moved to the area or sold a home prior to purchasing this property. If the seller backs out, he is left with no place to live. He can sue the seller to force her to complete the transaction.

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