All contracts for the purpose of selling real property must be in writing. Therefore, from a legal perspective you do not have to move forward with the transaction.
Notwithstanding the above, what is your financial situation? How quickly do you want to get out? Generally speaking utilizing the tax assessor's value for your home is good starting point, however (depending upon the market/economy) the amount is lower than the actual market value.
You need to get a comparative market analysis (appraisal) to determine the correct value of the home.
You then need to find out after looking at all the costs, time ,etc.of your situation....if selling for a higher amount would be more profitable and outweigh the initial agreement you had with your tenant. Only you can answer that question as in many instances the issue is not only money.
Hope this helps.