What to do when you receive conflicting instructions from buyer and seller

Two signed parties. Two contradictory directions. One escrow holder in the middle with funds that cannot move until someone figures out which instruction controls.

This situation is more common than it looks, and the stakes are real. Acting on the wrong instruction exposes the office to fiduciary breach claims and E&O liability. This guide covers how to identify conflicting instructions, what steps to take when they arrive, and how to document the file so the office can show exactly what it relied on before deciding to act or hold.

What counts as conflicting instructions from buyer and seller

When a buyer and seller give you contradictory directions on the same material value, stop acting unilaterally. Request a formal, signed written amendment. Do not favor one party. Pause the transaction until both parties reach mutual agreement or consult legal counsel.

So what does "conflicting instructions" actually mean in practice? It's when two signed parties direct the escrow holder to do incompatible things with the same funds or terms. One party says release. The other says hold. One account number appears on signed instructions. A different number arrives by email the day before closing.

You'll see conflicts show up in predictable places:

• **Wire routing:** Seller's signed instructions specify one account, then a message claiming to be the seller directs funds elsewhere
• **Proration disputes:** Buyer calculates property tax credits one way, seller calculates them another
• **Release timing:** One party demands immediate disbursement while the other demands a hold pending inspection resolution
• **Commission splits:** Conflicting direction on who receives what portion of agent compensation
• **Payoff amounts:** Seller disputes the lender's payoff demand or claims a lien has already been satisfied

Why buyers and sellers send escrow conflicting instructions

Conflicts usually arise from identifiable patterns. Once you recognize the source, you can respond faster and document more precisely.

### Late verbal changes after signed instructions

One party calls or emails requesting a change after signing. The problem is that verbal or informal changes create ambiguity about which instruction controls. Now the escrow holder has two conflicting directions on file, and only one of them is signed.

### Mismatch between the purchase contract and escrow instructions

Sometimes the purchase agreement says one thing while the escrow instructions signed later say something different. The escrow holder inherits a built-in conflict from the transaction's own documents. Neither party may even realize the discrepancy exists until closing day.

### Impersonation and social engineering at the moment of action

AI-driven fraud increasingly exploits credible impersonation right before funds move. In this scenario, the "conflict" may actually be between the real party and an impersonator. The moment of action, when the office converts evidence into a release decision, is where impersonation risk concentrates.

### Disputes over payoffs, commissions, and credits

Last-minute disagreements on liens, agent fees, or credits are common. Unlike impersonation, disputes over payoffs and credits are legitimate conflicts between real parties who simply disagree on the numbers.

Whose instructions control when buyer and seller disagree

The escrow holder is agent to both parties. That means the holder cannot favor one over the other. When buyer and seller give conflicting directions, the holder cannot act on disputed funds without joint written direction or a court order.

If the parties cannot agree, the escrow holder's options narrow to two: hold the funds indefinitely or file an interpleader. An interpleader is a court filing where the escrow holder deposits the disputed funds with the court and asks a judge to decide who gets them. It's a last resort, but it protects the holder from liability when the parties won't resolve the conflict themselves.

When a purchase offer conflicts with the escrow instructions

Escrow instructions typically govern the escrow holder's duties. The purchase contract governs the parties' rights against each other. When the two documents conflict, the escrow holder follows the signed escrow instructions unless both parties agree otherwise in writing.

Why? The holder is not a party to the purchase contract. The holder cannot interpret or enforce contract terms between buyer and seller. The holder's job is to follow the escrow instructions, which both parties signed specifically to direct the escrow.

Who has authority to change escrow instructions

Both parties have to sign an amendment to change escrow instructions. One party alone cannot modify the instructions unilaterally.

This is precisely why verbal requests or single-party emails create conflict. They attempt to change something that requires joint consent. Until both parties sign, the original instructions remain in effect.

Steps to take when you receive conflicting instructions

### 1. Stop the pending release

Funds do not move while the conflict exists. Halting the release protects the office from liability for acting on one party's instruction without the other's consent.

A control layer can hold releases when a Review Record is stale or unsupported. When a conflicting instruction arrives, the record goes stale, and the release cannot proceed until the conflict is resolved or an owner approves an exception.

### 2. Identify the material value in conflict

Name the specific dollar amount, account number, or proration at issue. Precision matters because the documentation will need to show exactly what was disputed and how it was resolved. Vague descriptions like "wire instructions" or "closing costs" are not enough.

### 3. Confirm each party's position in writing

Request written confirmation from both buyer and seller on their current instruction. Verbal or informal direction is not a basis for action. The file needs a clear record of what each party actually wants, in their own words, with a timestamp.

### 4. Compare against the signed escrow instructions and contract

Match each party's stated position to the signed documents. Which instruction aligns with signed authority? Which represents a requested change? This comparison determines whether you're dealing with a dispute over existing terms or a unilateral attempt to modify them.

### 5. Require a joint written instruction or hold the file

If the parties cannot agree, the funds stay in escrow. A joint written amendment resolves the conflict. Absent that, the file cannot close on the disputed terms. The escrow holder's job is to wait, not to pick a side.

How to document the conflict on the file

Every communication, every instruction version, and every refusal to sign belongs in the file. The record shows what the office relied on before acting, or before deciding not to act.

A Review Record captures sources, limitations, and who signed off. When the file state changes, the record goes stale, and the documentation shows exactly when and why. The mechanics of staleness are laid out in Managing stale records and material changes in closing files. Here's what to retain:

• **Original signed instructions:** The baseline against which everything else is measured
• **Conflicting instruction received:** With timestamp, source, and delivery method
• **Written confirmation requests sent:** Date, method, recipient
• **Responses received:** Or a note documenting lack of response
• **Decision made:** Action taken or hold placed, with the reason documented

How to communicate with both parties without taking sides

The escrow holder remains neutral. That means no legal advice, no favoring one party's position, and no interpreting the purchase contract for either side.

When possible, communicate the same information to both parties simultaneously. If you tell the buyer something, tell the seller the same thing at the same time. Written communication creates a record. Phone calls do not, unless you follow up with a written summary.

The goal is transparency. Both parties see the same information. Neither party can claim the escrow holder took sides or withheld information.

When to involve counsel or file an interpleader

An interpleader is appropriate when the dispute is prolonged, one party threatens litigation, or the risk of loss to the escrow holder is real. Counsel involvement typically precedes filing.

Signs it's time to escalate:

• One party threatens to sue the escrow holder
• The parties have stopped communicating with each other
• The dispute involves a claim of fraud or forgery
• The conflict cannot be resolved before a contractual deadline

Filing an interpleader is not an admission of wrongdoing. It's a recognition that the escrow holder cannot resolve a dispute that belongs to the parties or the court.

How to prevent conflicting instructions from blocking a closing

Proactive steps reduce how often conflicts arise in the first place. Most conflicts come from ambiguity at opening or changes that bypass the amendment process.

• **Clear escrow instructions at opening:** Require complete, signed instructions before accepting funds
• **Single amendment process:** All changes require joint signature, no exceptions
• **Verification at the moment of action:** Confirm wire routing and payoff amounts before release, not just at opening
• **Visible limitations:** Make each source's limitation visible on the file so gaps are caught before they become disputes

Fiduciary and E&O risk of acting on one side's instructions

Acting on one party's instruction without the other's consent exposes the office to breach of fiduciary duty claims and E&O liability. An office that releases funds based on a disputed instruction may be liable for the full amount of the loss.

| Action | Risk | |--------|------| | Release funds based on one party's verbal change | High liability exposure; no documented consent from other party | | Hold funds pending joint written instruction | Low liability; neutral position maintained | | Release with current Review Record and joint sign-off | Defensible; documented basis for action |

The difference between defensible and indefensible often comes down to documentation. Did the file show what the office relied on before it acted? Or did the office act on an unsupported instruction?

Run a live file control test for conflicting instructions

Veto records what the office reviewed before acting, holds releases on stale or unsupported records, and makes each source's limitation visible on the file. When file state changes (a conflicting instruction arrives, a payoff amount changes, a wire destination is disputed), the Review Record goes stale and the release cannot proceed until a new record or owner-approved exception is created.

Run a live-file control test

FAQs about handling conflicting buyer and seller instructions

### What happens if one party stops responding after a conflict surfaces?

The escrow holder holds the funds until both parties respond in writing or the holder files an interpleader. Silence from one party does not authorize the holder to act on the other party's instruction.

### Does a text message or email count as a binding change to escrow instructions?

Generally, no. Most escrow instructions require signed written amendments. An email or text is not a substitute for a signed instruction unless the original escrow instructions specifically allow it.

### Can an attorney letter override signed escrow instructions?

An attorney letter states one party's position but does not bind the other party or amend the escrow instructions. The escrow holder cannot act on an attorney letter alone.

### What is the 3 3 3 rule in real estate?

The 3 3 3 rule is a guideline for real estate agents about client communication frequency. It is unrelated to handling conflicting escrow instructions.

### How should an escrow officer handle conflicting instructions from two supervisors on the same file?

The officer escalates to the office owner or designated approver and documents the conflict. Internal policy designates a single decision-maker for covered instructions. For why every covered instruction needs its own current review record, see Why every covered instruction requires a current review record.