Dumb Real Estate Question..

Anonymous-0 · May 19, 2014

Not wanting to Hijack Colekicker's post below.
Since the seller has a right to up the ante, after offers are made... Are those offers binding on the person making the offer? Always wondered if the buyer can just back out, say, if he/she finds a propery they like better..

BigTone · May 19, 2014

nothing is binding until the closing. ~Anthony

Sprint 6 · May 19, 2014

Buyer can back out, but seller can keep their earnest money.

jimg.allentown · May 19, 2014

It all depends on the RE laws in your locality. In some places (like where I am), once an offer is accepted, seller is bound until the offer is either fulfilled or withdrawn. The seller cannot simply raise the asking price or accept another offer. But, there is more than one way to break a contract as we all know.

Mike (WA) · May 19, 2014

Nothing is binding until offer AND acceptance. So if a buyer makes an offer, he can withdraw it until seller signs and accepts it. What I think happened with Colekicker is that he (and some others) submitted offers, but seller's agent sat on them, waiting to see what other offers came in. At this point, there are 4 pending offers, none of which has been accepted by the seller, so the parties are free to keep negotiating. But once a buyer and the seller have both signed one offer, its binding on both. Subject to other language in the contract, which is usually to the effect that if the buyer backs out, seller gets to keep the earnest money only. But if seller backs out, buyer can enforce the deal.

Your results may vary.

Mike (WA) · May 19, 2014

And our score is, Sprint 1, Big Tone 0. More after these messages.

Goose · May 19, 2014

As others have said, nothing is binding until an offer and acceptance are signed by both buyer and seller.

If the buyer backs out, the seller can keep any earnest money that was included in the offer. If the seller tries to back out, the buyer can sue for specific performance.

Pops1532 · May 19, 2014

(quoted from post at 23:14:09 05/19/14) Nothing is binding until offer AND acceptance. So if a buyer makes an offer, he can withdraw it until seller signs and accepts it. What I think happened with Colekicker is that he (and some others) submitted offers, but seller's agent sat on them, waiting to see what other offers came in. At this point, there are 4 pending offers, none of which has been accepted by the seller, so the parties are free to keep negotiating. But once a buyer and the seller have both signed one offer, its binding on both. Subject to other language in the contract, which is usually to the effect that if the buyer backs out, seller gets to keep the earnest money only. But if seller backs out, buyer can enforce the deal.

Your results may vary.

What Mike said....
It boils down to the laws of the state and the language in the contract.

redforlife · May 19, 2014

Offer is not binding if it is not accepted. If offer is accepted and papers have been signed, its binding. Technicality's might vary from state to state, but wouldn't vary much I wouldn't think.

Dave H (MI) · May 19, 2014

I prefer to not practice law without a license, but can tell you that around here when you sign a listing you are making an offer to sell at that price. If someone comes in at full price cash you have an accepted offer and a contract. In the real world I don't know if it would go to court or what the maniac on the bench would do with it but the realtor would expect you to pay his commission if you backed out. He did his job and would want to be paid. I guess it is going to boil down to how the listing was worded. That is how it was explained in business law class by the attorney who taught it. But call a lawyer if you have a real issue with what is going on and have him look over the paperwork.

John T · May 19, 2014

To form a legally enforceable contract it requires (best I recall off the top of my head without researching so no warranty)

An Offer
An Acceptance
Consideration
Capacity
Legality

An Offer alone DOES NOT make a valid enforceable contract HOWEVER if an Offer is made and its Accepted and the other requirements are in place NOW WE HAVE A VALID LEGALLY ENFORCEABLE CONTRACT.

However as a practical matter as far as real estate sales contracts, A SELLER CAN BE FORCED BY LAW TO COMPLETE A HOME SALES CONTRACT, HOWEVER ITS A BIT TOUGH TO FORCE A PERSON TO BUY A HOME. Often if the buyer backs out the seller may retain the earnest money deposit.

AS I ALWAYS PREACH: Consult a local trained professional attorney and don't hang your hat on lay opinions offered on a tractor forum is my best advice.....

John T Country Lawyer

ss55 · May 19, 2014

Plus ever addendum has to be completed or withdrawn:
financing,
sale of existing home,
mold test,
home inspection,
appraisal,
etc,
etc.

MarkB_MI · May 19, 2014

It seems to be a regional thing whether sellers keep the earnest money when a deal falls through. My sister used to work in real estate, and they would normally refund earnest money unless the buyer behaved very badly. It is, of course, up to the seller whether to retain earnest money or even sue for breach of contract, so it's best to be nice if you want to back out of a deal.

My sister-in-law and her husband had signed a contract to construct a new home, then found an existing home they liked better. They had to hire a lawyer to back out of the deal, and it cost them several thousand dollars by the time it was done.

Pops1532 · May 19, 2014

If a deal goes south the real estate broker sometimes keeps the earnest money. Depends on the situation.

Another interesting twist on earnest money......I know a family that has bought a lot of houses and apartments as family investments over the years. Sometimes if their offer was refused the real estate broker was slow to refund their earnest money. They got tired of the real estate people playing that game. Now when they made an offer on a property they attach an IOU payable upon acceptance of their offer.

waltdavies · May 19, 2014

Always put a time limit on your proposal along with your earnest money.
Walt

DaninKansas · May 20, 2014

I have never seen an "offer" on a realestate deal that was written as an "acceptance" of the offered price. I'd love to see one if you have it.

colekicker · May 20, 2014

Think of it this way. All offers are contingent on something. So at this point, everyone has put in $1,000 earnest money. Usually you'll get it back if the deal is either not accepted or you cannot obtain financing, fails inspection or does not survey out to the listed area of land. Also most won't entertain the offer without a pre-qualification letter, if you are dealing with a bank owned property especially.

Dave H (MI) · May 20, 2014

Are you always so rude when you do not agree with someone? You are only stating what the form title says. May not affect the substance of the document. Generally those forms contain an amount less than the original offer to sell which would make them counteroffers. It is then incumbent on the seller to accept or decline the offer. You can believe what you want to believe, I frankly do not care. I am not a lawyer, I'm a CPA. If you hire a real estate agent around here and have him put an offer out to sell your property at an agreed upon price in writing and he advertises, does showings and performs under the terms of your contract he will expect a commission if he brings you a buyer who accepts all the terms of the listing. You can call it anything you want, he will consider it a contract.

MarkB_MI · May 20, 2014

You seem to be confusing the listing agreement between the seller and listing agent with the actual sales agreement between seller and buyer. They are different things.

The listing agent can't compel you to accept an offer. But he can certainly sue you to collect the sales commission he would have made on the sale.

Dave H (MI) · May 20, 2014

No, I'm not confused. I didn't say an agent could compel you to sell. Under common law as I learned it, however, the seller is making the original offer and an unconditional acceptance would make a contract. I understand that real estate law of today is more complex than common law. I am not an attorney, but I did state my credentials clearly. If you are a real estate expert or an attorney feel free to state yours. What I specifically said was that if you turn someone down who comes to the table with exactly what you were asking, without any condition or changes, then your realtor may demand commission from you. Hope this clarifies what I was trying to say.

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