Great! You Have Accepted an Offer on Your Property. Can You Now Accept a Higher Offer?
Well as 2021 begins, the same problems that plagued 2020 are still present in the real estate market; more demand than supply and low rates keeping prices high. Now a once formerly "hard to imagine" scenario is regularly discussed...once a Seller has accepted an offer, can a higher offer then be accepted? The short answer is that the response can vary State to State. The long answer is that in real estate there is rarely a short answer. As always, we strongly recommend that as a Seller it's best to discuss this with your Realtor®, Agent, Lawyer, or other Professional Advisor, and considering the market that we are in, it's sound advice to discuss this possibility BEFORE it actually happens so there is no rush to judgement.
We here at PropertyGuerilla.com are old enough to remember when Sellers used to look for avenues with which to ensure sales contracts were fulfilled, and now the question of how to get out of them is becoming the norm! A good rule of thumb is that once a contract is fully executed by all parties it's safe to assume that breaking it "could" lead to legal consequences. Again, that is a rule of thumb and varies by State, but having this discussion before accepting the first offer will prepare you as a Seller for this scenario. Typically this does not mean that you cannot accept Back-Up offers, which recognize the existence of the executed primary offer but can be implemented if, for some reason, the primary offer is terminated or does not come to fruition.
Some Realtors® and Agents try to dissuade folks from writing Back-Up offers because they insist it impedes further searching and the ability to enter into contracts on subsequent properties. In a very literal sense this is true, but in a real world practical sense, this is not always the case. As the back-up offer is exactly what it's stated, as long as it's entered in to containing language that it can be cancelled at the Buyers discretion, the only immediate effect on the Seller would be if they were using it to leverage the primary contract, and the ability to cancel would free the hand of the Buyer to continue searching. If a Seller does not wish to accept a back-up offer with such a condition then there is no reason they should, but in a market that still has demand far exceeding supply, what's the downside?
The very bottom line for Sellers is to make sure that you are 100% comfortable with the terms and the price before accepting any offer, and if one comes in that is higher (unless the ability to accept is somehow permissible in your State), then make every effort to secure it as a back-up and be happy with your primary offer. A bird in the hand, as they say.
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