So who is to blame?

Ellie ~ Who could have missed that in a contract?  How terrible for the buyers!  You think they could have come to another agreement or worked it out but it sound like that is not going to happen either.  Both agents could have helped along with the buyer and seller.  

What an awful situation. It seems to me the seller agent is likely to blame...but it might mean more to the story then you have been told.

Ellie - While I'm not a Realtor/agent selling or listing property, I would say that the buyers have a pretty good case to sue.  I'm going to park though to see what kind of responses you get and how the RE Attorneys here respond.

Wow - you would need more details, but in Colorado, the Seller is held to Specific Performance and CAN'T back out.  Depending on what the Listing Agent did or did not tell them, that sounds like a very sticky situation that I wouldn't want to be party to.

Mis-communication is a horrible thing.  That would just bum me out completely.  Makes you wonder if the sellers really knew this or did they just change their mind?

In NY once there is a fully executed contract neither party can back out of a contract unless there are legal reasons stipulated in the contract. If a buyer backs out they lose their 10% deposit. If a seller backs out and breaches the contract they will be sued for specific performace.

Blame? "Ignorance is no excuse in the eyes of the law"

That is sad.  What a bad experience. 

I negotiated a contract a month or so ago and the seller agreed to pay $X in buyer's closing costs but then tried to renegotiate the terms of the contract including the buyers expenses that had been agreed to.  I had been very cautious about writing the offer because I could see the seller was underwater.  I don't really want to think about blame...  because I don't know the dynamics of the relationship between the listing agent  and her client.  I don't think that has ever happened to me before and the seller made us aware before the buyer spent money on inspections.

Yikes!  It's a tough situation that no one would enjoy being in.  I hope it works out for the buyers to find another home soon, whether or not they take legal action.

Hmmmm...gut says listing agent did not do a net sheet. BUT it's always tough to know who did what to whom...who is telling the truth etc. That is why I really like it when the agent on the other side is a pro.

 One thing we do when sending an offer is put a summary of the offer in the email with the contract attached. First item is the price, second item is the seller subsidy requested...hard to miss and would help cover our butts if need be.

Hi Ellie, Oh, sounds like a breakdown in communication somewhere along the way. This is a terrible situation for all parties when this happens.

I'm surprised they can back out.  There must have been a ratified contract with the 4% concession listed.  Hard to know what went wrong without knowing more details.  I like the idea of sending the details in an email that way no one can say you didn't tell them.