Can a Seller Accept Another Offer While Under Contract? [2020] | Hauseit®

Can a Seller Accept Another Offer While Under Contract? [2020] | Hauseit®

January 28, 2020 0 By Luis Garrison


A seller cannot accept another offer if their
listing is in contract, meaning that they already have a fully executed purchase contract
in place with a buyer. Technically, a seller can do whatever they
wish because accepted offers are rather meaningless in most states such as New York, where only
fully signed contracts hold any sway. However, accepting another offer would be
meaningless as they would not be able to cancel the contract and sell to the new buyer. Can the Seller Accept Another Offer During
Contract Negotiations? Yes. If a contract is only being negotiated but
has not been counter-signed by the seller yet, then a seller is free to accept another
offer. In fact, a seller is free to accept another
offer even if the buyer has signed the contract and handed over an earnest money check as
long as the seller has not counter-signed and thus fully executed the contract. Are Accepted Offers Binding? No. Accepted offers are generally not binding
in most states where only fully executed purchase contracts hold any sway. For example, in New York buyers never sign
anything at the offer submission and negotiation stage. Offers are typically submitted by email through
buyers’ agents, and an accepted offer is nothing more than a handshake on general terms
and price. An accepted offer really means that because
the buyers and sellers have a general agreement of terms, their lawyers can iron out the details
and the buyer’s attorney can conduct legal and financial due diligence on the property. When Do Accepted Offers Become Binding? An accepted offer only becomes binding once
both parties have fully signed the purchase contract, and both the buyer’s attorney
and the seller’s attorney has received a copy of the fully executed contract. Can Sellers Send out Multiple Contracts? Yes, there’s no prohibition against the
seller sending out multiple contracts to different buyers. Remember that nothing is binding for either
party until a contract is fully executed, which means either party could walk away or
do a deal with someone else at any point before contract execution. Can Buyers Negotiate Contracts on Multiple
Properties? Yes, buyers are free to negotiate contracts
on multiple accepted offers to their satisfaction, and then choose a contract to sign. This can be a great strategy as it’s pretty
unlikely that a seller will not counter-sign a contract, and even if they do, the buyer
already has a backup contract or two that is ready to be signed. Is It Ethical to Send out Multiple Contracts? This is a grey area that doesn’t have a
clear answer. While listing brokers have a duty to treat
all parties fairly, they also have a duty to act in the seller’s best interests. These duties can be rather conflicting in
a situation like this. Should Sellers Disclose That They Are Sending
out Multiple Contracts? Sellers should disclose to all parties that
multiple contracts are being sent out. While this isn’t required, this is definitely
a nice move especially because buyers spend time, money and effort during the due diligence
period. Remember that buyers have to engage their
lawyer to review and negotiate the contract. Furthermore, the buyer’s attorney must conduct
due diligence and review the building’s annual financial statements, original offering
plan, board meeting minutes, and condo bylaws or co-op house rules. Learn how you can save all 6% on broker commissions
when you sell, and $20,000 or more on closing costs when you buy at www.hauseit.com