Updated September 28, 2026
A signed purchase agreement is not a formality you can walk away from because a better number showed up, and the position you're in as a seller trying to back out is meaningfully worse than a buyer's. A buyer who terminates before contingencies are released generally just gives up their deposit or gets it returned, depending on the timeline. A seller who tries to back out of a binding agreement faces a different set of remedies — the buyer isn't just out a deposit; they've been deprived of the building itself, and the law treats real property as unique in a way it doesn't treat most other contract disputes.
Real estate is generally treated as legally unique — no substitute building is exactly the same, which is the doctrinal reason courts are more willing to order specific performance in real estate disputes than in most commercial contract disputes. That means a buyer whose seller tries to back out has a real, not just theoretical, path to asking a court to force the sale to close on the agreed terms, in addition to seeking money damages. Whether a specific buyer actually pursues that route is a separate question — it's slow and expensive for them too — but the fact that it's available at all changes the seller's leverage compared to a buyer walking away from a deposit.
A better offer arrives after you've already signed. The most common scenario, and the least sympathetic one legally — a higher number from someone else is not a recognized excuse to breach a signed agreement.
Circumstances change. A family decision reverses, a refinance becomes attractive, or the market shifts and holding looks better than the price you agreed to.
You discover something about the buyer that concerns you, separate from any actual breach on their part. Discomfort alone isn't a basis to cancel if the buyer hasn't defaulted.
You believe the buyer failed to meet an obligation. This is the one legitimate off-ramp — the contract's own default provisions govern what happens next, and they're worth reading closely with your attorney before you act on your own read of what happened.
Return of the deposit, at minimum, plus potential damages the buyer can show — lost opportunity costs, other deals they passed on, diligence expenses already incurred.
Exposure to a specific performance action, where a court could order you to complete the sale anyway, defeating the purpose of backing out while costing you the legal fees of losing that fight.
Damage to your reputation with brokers and buyers. LA multifamily is a smaller world than it looks, and a seller known for backing out of signed deals finds the next listing's buyer pool thinner and more skeptical.
The practical cost of relisting a building known to have had a collapsed sale, which often invites lower offers from buyers who assume something is wrong.
Read the agreement for a seller-side condition that hasn't been satisfied. Some agreements protect the seller too — worth reviewing with your attorney rather than assuming none exist.
Negotiate with the buyer directly. If your circumstances have genuinely changed, many buyers would rather renegotiate, extend, or accept a mutual release than fight a specific performance action that's expensive for them too — with your attorney involved, not informally.
Have your attorney review whether any legitimate defense exists before you take any action that could be read as a breach. Whether you actually have an out depends entirely on the specific language in your agreement and the facts of your situation — this is not a decision to make based on general principles alone.
The best protection against regretting a signed agreement is not signing one you're not genuinely ready to close. If you're not certain, or you suspect a higher offer might materialize, that's a conversation for your broker before you accept — including whether running a genuine multi-offer process first would have surfaced the better number without putting you in breach of anything. That discipline, tested at the listing agreement stage, is part of what makes a Los Angeles multifamily sale close on the terms everyone signed up for.
A seller who wants out of a signed deal because a better number appeared is not in a stronger position than the buyer who abandons a deposit — they're in a weaker one, facing remedies designed specifically because real property can't be easily substituted. The time to protect yourself is before you sign, by being certain of the decision and testing the market fully first. After you've signed, the honest move is usually to close the deal you made, or to have a real conversation with the buyer and your attorney about a mutual release — not to simply stop showing up.
Is backing out as a seller the same risk as a buyer backing out?
No. A buyer generally risks the deposit, subject to the contingency timeline. A seller risks the deposit plus potential damages and the possibility of a court ordering the sale to close anyway, because real property is treated as legally unique.
What if I have a legitimate reason, like a family emergency?
Talk to your attorney about whether the agreement has any provision that applies, and whether a negotiated mutual release with the buyer is realistic. A sympathetic reason doesn't automatically create a legal right to cancel, but it often makes buyers more willing to negotiate a release than you'd expect.
Can I just tell my broker to stop responding and let the deal die?
No — going silent doesn't cancel a binding agreement, it just adds delay and bad faith to a situation that's already exposing you to breach. Any exit needs to go through your attorney and, ideally, a documented conversation with the buyer.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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