Seller Backouts and Legal Boundaries

Q: I represent the seller in a pending sale. Both parties have signed the closing documents, and everything is ready, with funding as the only step remaining. The seller has just informed me that they have changed their mind and no longer wish to proceed with the closing. How should I advise them?

A: As real estate licensees, we are not attorneys. A seller who is considering breaching a contract needs legal advice, and under ORS 696.805(3)(e), agents are required to recommend that the seller contact an attorney. It may also be helpful to refer them to Section 32.1 of OREF 001 – Residential Real Estate Sale Agreement. This section outlines when a buyer is entitled to a refund of earnest money, including situations where the seller breaches the contract.

The key point in this section is that the buyer’s remedy is not limited to a refund of their earnest money. The buyer may pursue other legal remedies, and an attorney can explain those potential risks to the seller.

All comments and responses from OREF or its staff, managers, and volunteers are non-legal opinions made for general purposes. Each Forms subscriber must rely solely upon their Principal broker or personal legal counsel for specific advice and instruction. You and your client should independently confirm that the Form(s) you use are legally suitable for the purposes intended and that they are current with respect to all laws and regulations.