Seller is Trying to Back Out, What Should I do?

So some basic facts: I have a signed PSA with a seller for a property who lives outside of the US and is not a US citizen. They returned a hard copy original, with wet signature, via the mail (along with a handwritten and dated note, asking about next steps to proceed with the sale). The PSA did not include an earnest money deposit, and none has been paid by me.

I signed the agreement as well, and sent an electronic copy of the double-signed agreement to the local title company with instructions to proceed with the title work and closing. Title company spoke with Seller and verified necessary info from him regarding delivery of the closing docs, etc. FedEx tracking shows the closing docs were delivered to Seller almost 2 weeks ago now, signed for by someone with the same last name as Seller (likely his wife). In speaking with Seller this morning he first denied having received the closing docs, and then went on to deny ever having signed a PSA. Our signed and agreed to purchase price is about $17.5k, but he's now saying he won't consider selling the property for less than $30k.

Meanwhile, I'd already lined up an end Buyer for a double-closing at a purchase price of $40k. The PSA with my end Buyer includes contingency language that should nullify the agreement if I don't ultimately close with my Seller. If the dollar amounts were substantially lower, I'd probably just cut bait and move on to the next deal, but walking away from $22k profit on a same-day double-closing (no holding costs / risk of not selling for the price I think it's worth), is pretty hard for me to swallow.

Has anyone ever tested the enforceability of a simple one-page PSA that does not include earnest money deposit? Would the fact that the seller is outside the US and has no legal ties here other than ownership of this property make things any more or less favorable for me to pursue legally? For instance, I'm guessing it might make him less likely to defend a claim in court effectively. Would he be harder/impossible/more costly to serve, though, and would that possibly play any factor in likely outcome? I'm over the limit for small claims, in case that makes a difference.

So what should I do? What have others done in similar situations? I've already left a message for an RE attorney local to the area where the property is, referred to me by the title company.

Can you try to renegotiate the sales price with the seller? Maybe meet somewhere in the middle. If not, a $10K profit is still a 33.33% return for a same day double closing and that is not bad for little work and no upfront funds for the acquisition.

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I like @Dan-McDermott's idea. I've never tested the enforceability of a PSA with no earnest deposit, but with no money changing hands upfront, I would imagine it doesn't have very sharp teeth.

I once had a property under contract for $27K that was easily worth $500K... and it would've been the best deal I'd ever done, but I never put down an EMD and when the seller decided to walk from the deal, I had no hammers at my disposal.

I think one lesson is, if you ever think you'll have a really hard time walking away from the deal, make sure you put down that deposit.


If it was me, I would probably try and work something out...but worst case, I'd do the $30,000 he's asking for. That's still something when you double close for $40,000 and I'd like to avoid all the trouble of trying to hold him to his word.

I'm not very confident in the enforceability of a one page PSA without earnest money and the time and effort it would take to try and hold him to it... doesn't sound worth it to me for an extra $12K.

Sorry man! Sounds like you're in a tough situation.

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Thanks @Dan-McDermott, @retipsterseth, & @Jarenb , I've definitely had the same thought, regarding there being enough room left in this deal to allow for some renegotiating, but my concern is the way the seller has chosen to completely deny having ever known anything about any of the various documents, including the PSA, the handwritten note that he mailed back to me with the PSA, the closing docs that have FedEx tracking showing they were delivered at his house.

I feel like that puts him in a category of someone who's not negotiating in good faith, so who's to say that if I agree to pay him $X more he won't just waste more of my and the title company's time and money, rewriting and re-sending documents, only to come back and ask for even more money in a couple of weeks. To make matters worse, this individual has no access to fax or email, so every document I send has to be by either international postal service, or courier like FedEx, so there really is a non-trivial cost and time factor to every exchange of documents back and forth to Europe.

I was thinking if I offered him any more money at all, I might offer it outside of closing, meaning I'd sign something stating that I agree to pay him $X additional funds after we close and record the deed at the originally agreed upon price. I recognize he might not go for that, but under the circumstances it feels like a fair compromise to me.

Also, just an update on where things stand, I recorded a Notice of Claim against the property yesterday afternoon, and I'm supposed to be speaking with an attorney referred to me by the title company later today.

@dl7573 that makes sense.

If you increased the price at all, could you give him a more robust PSA and send EMD to the title company so it's more secure? That might be an option as well!

@Jarenb, that's a great idea, so if he does try this again I'd be on better footing legally to enforce it. The attorney is giving me a free consult due to the referral from the title company, so I'm going to try to run as many of these ideas by him as I can and then figure out how I'll re-approach the seller.

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Yep exactly!

@Dan-McDermott @retipsterseth @Jarenb @BradenC, had my consult with the attorney this afternoon and thought you guys, and maybe others in the future, might be interested in what I learned. Some of this actually differs a little from the conventional wisdom that some of us have heard before:

  • The absence of an Earnest Money Deposit has no effect on the enforceability of the contract. Said my one-page purchase and sale agreement (while not perfect in all regards) is entirely enforceable, if I wanted to pursue it.
  • My PSA would have been better had it included language specifically stating that Seller would have to pay my legal fees in the event that he is found to be in breach of contract. Mine didn't have this, and in Florida at least, this must be specifically stated in order for you to be entitled to collect those costs, apparently.
  • Said if I filed suit and the Seller didn't contest at all (maybe possible, but probably not the most likely outcome), it would likely cost me $3k to $5k to get a ruling for specific performance of the sale.
  • On the other hand, if I filed suit and the Seller did defend himself, it would almost certainly have to go to trial in order to get resolved, and would likely cost me upwards of $20k to $30k, especially given the logistics of dealing with a party overseas (having to serve him, take depositions, etc.). Said my chances are pretty good; although, he could think of a couple of defenses that he would try to put forward if he were on the other side, as well.
  • Regarding my recording a Claim of Interest against title on the property, said this was fine while I work through what we're going to do here, but if I don't file suit and don't ultimately renegotiate with the Seller (i.e. just end up walking away), said that I definitely should not leave that cloud on title. Said that this is not like a mechanic's lien where I have already incurred specific damages that I'm trying to recoup, and leaving this cloud in the event that I'm not actively working to pursue my claim could open me up to being found guilty of slander against title, potentially costing me headaches, legal fees, and in the worst case some judgement for damages at any point in the future, if that cloud caused a future attempted sale of the property to fall through.

So having said all that, he pretty much co-signed on the idea of trying to renegotiate the agreement with the Seller, potentially adding language to my contract about who pays what legal fees in the event of breach; no need to add EMD; but should consider enlisting the help of another third party local to the Seller, like a title/closing company where he lives, that can work with me and my title company to ensure, and attest to the fact, that the Seller does receive the documents himself, understands them, and is committing to what we've agreed to.

Will probably pursue on that basis. Thanks for all the input!


@dl7573 wow, that's pretty interesting! I wonder how much of this is specific to Florida vs other states.

Regarding that idea of adding language about who pays what legal fees... my only concern would be spooking a motivated seller. We're trying to make it push-button easy for them to say "yes", without introducing any threatening language or causing them to question the deal in any way. I would be concerned that once we bring this whole "who pays for what in the event of a lawsuit" language on the table, that might make some people just say, "Nah".

Still, those are definitely some interesting findings. I'll have to investigate that first bullet point about the enforceability without a deposit. I can see how there would be some reasonable grounds for contesting it. Seems like any time you've got a signed contract over anything, it probably carries some weight, I'm just not sure how much weight.

@retipsterseth, I hear you about not wanting to set up roadblocks unnecessarily with prospective Sellers. For one thing, and for obvious reasons, if I can reach a(nother) mutually agreeable price with this Seller, I might include language with them that I wouldn't with any average prospective seller in the future, who hasn't given me reason to question whether they're negotiating in good faith, or on which deal there might not be as much meat on the bone to be that worried about it.

That said, I just looked up the Florida Assoc of Realtors Vacant Land Contract ( to see how it handles this particular issue, and found the following:


13. DEFAULT: (a) Seller Default: If for any reason other than failure of Seller to make Seller's title marketable after diligent effort, Seller fails, refuses or neglects to perform this Contract, Buyer may choose to receive a return of Buyer's deposit without waiving the right to seek damages or to seek specific performance as per Paragraph 14. ...

Paragraph 14 then goes on somewhat extensively to describe a Mediation and Arbitration process, the costs of which the FAR BAR contract says will be split evenly by the parties. That paragraph then closes out with: "In a civil action to enforce an arbitration award, the prevailing party to the arbitration shall be entitled to recover from the nonprevailing party reasonable attorneys' fees, costs and expenses."

Based on this experience, I might consider trying to insert some simplified version of this in some future contracts. Basically just stating that the parties agree to employ and abide by mediation and arbitration in the event of a dispute, and then that last sentence from above, in the event someone fails to comply with the arbitration outcome. I suspect that arbitration would cost a lot less than $20k to $30k, and if I got this down to a sentence or two that could still fit within a one-page PSA, I don't know that it would sound too scary to most buyers, but who knows.

Great info here. I have bought investment houses on one page PA and theybwere perfectly enforcable without earnest money according to my lawyer.

It is really a question of the amount of time/effort/money you want to spend trying to negotiate with someone who negotiated in bad faith to begin with.

My first move would to let the seller know that you have a legally enforcable signed contract and have spoken to your lawyer about it. But if he didnt bend to that tactic, then i would move on.

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Just wanted to offer an update on this, in case anyone was curious or it’s helpful to anyone at some point. Back in late October I spoke with the seller again (who lives out of the country, is not a US citizen, and does not have access to email or fax) by phone, and he agreed that he would sign a new purchase and sale agreement at $30,000 at the office of a notary public local to him, if I found one who would assist us. FYI, it appears that in Germany their "Notar" or notary public are actually the closest equivalent to our title/closing companies, and this is not a status given to just anyone who files the paperwork and pays a small fee as they essentially are in most states in the US.

In addition to the substantially higher price (which still leaves $10k margin for me on my double-closing to my end Buyer), I also added the following language to my revised PSA, so that I'd have better recourse if the Seller tries to back out again, like @Jarenb suggested above in this thread:

"DEFAULT; DISPUTES: If for any reason other than failure of Seller to make Seller's title marketable after diligent effort, Seller fails, refuses or neglects to perform this Contract, Buyer may choose to seek damages or to seek specific performance, per this agreement. In a civil action to enforce this agreement, the prevailing party to the action shall be entitled to recover from the non-prevailing party reasonable attorneys' fees, costs and expenses."

As always, I'm not a lawyer and anyone might use the above language, or not, in any of their own agreements, at their own risk.

I also rewrote the agreement to have the Seller covering most of the closing costs now, instead of my doing so as I normally do with a Seller that’s not a complete pain in my... Unfortunately, though, as I was originally concerned about and as others such as @jawollbrink also called out above, after the Seller verbally agreed to the above approach, on the phone, and I found a Notar local to him who would assist us (within probably 3 or 4 days of speaking with the Seller), the Seller then ghosted me (and the Notar) for over a month.

At that point, like Charlie Brown who had the football pulled away again, I cursed myself for falling for it and for wasting my time, and was ready to just walk away, finally. Although my agreement with my Buyer, who's been incredibly patient throughout this, doesn't expire until the end of this month, I contacted him and gave him the option to cancel it early and get his EMD back, or wait for another month to see if the Seller happened to come out of coma and start responding. However, the Buyer declined to cancel and said he would still very much like to buy the property, so out of equal parts of shame for disappointing my Buyer and frustration at the Seller for lying about never receiving (or signing and returning along with handwritten letters) various documents, I decided to take one last swing at it. Last week, I FedEx'ed (again, no email, no fax) a package to the Seller with copies of our original fully executed PSA at $17.5k, his handwritten note which he returned with the PSA asking about next steps in the transaction process, and his hand-addressed/labeled envelope in which he mailed me these documents, along with a copy of the Notice of Claim that I filed with the county against the property, and a new letter that I wrote explaining that he needed to contact the Notar and sign the new PSA for $30k as we'd last agreed to on the phone, or I’d have to pursue all legal recourse to enforce our original agreement at $17.5k.

This morning I woke up to a signed (and notarized, this time) PSA in my inbox, from the notary public’s office! Still have to get actual closing docs redrawn up and executed, but at least now if he backs out, I could pursue specific performance of the contract, with the legal expenses coming out of his $30k. We’ll see what happens next.