A person I know of but who is not a close friend has a house for sale that just went under contract yesterday, and without my knowledge, apparently accepted a offe for the property that is far lower than it's really worth even in a soft market.
Is it legal and ethically and can it be done to have an Agent still submit an offer for the property?
Can the seller break the contract legally, easily and without likely complications at such an early point?
Thanks.
2007-08-24 05:04:49 · 6 answers · asked by Middy S 2 in Business & Finance ➔ Renting & Real Estate
Yes, you can certainly put in an offer. The seller can accept it as a "backup" offer, meaning that if the first buyer goes away, you are next in line.
It will be difficult for the seller to back out of an accepted offer, but it does happen sometimes that the first buyer cannot get financing or changes their mind, in which case the seller can cancel.
If you offer is enticing enough, the seller might be willing to pay the first buyer to cancel the contract. But, be careful-- you don't want to be accused of interfering with the existing contract by encouraging the seller to back out-- that is illegal because it's against public policy.
Making a backup offer can be good (because you are automatically in first position if anything happens to the first offer), however the seller can also use it to pressure the first buyer to complete the sale because they have your backup.
Good luck!
2007-08-28 20:51:08 · answer #1 · answered by Genki 3 · 0⤊ 0⤋
If the property is under contract, the seller cannot break the contract without penalty and cannot entertain another offer. No agent can or will submit another offer while the property is under contract. Once a contract has been submitted and accepted, it is no longer at an "early point." The seller has put down earnest money, and expects the contract to stand. There are legal avenues open to the buyer if the seller reneges. Although the offer this person accepted is lower than market value, the key word here is "accepted".
2007-08-24 05:16:03 · answer #2 · answered by claudiacake 7 · 1⤊ 1⤋
1. If the person actually ratified the contract by signing it, then usually the only way to break that contract would be if there is language in the contract document that provides for the contract to be broken and specifies under what terms it can be broken. Sales contracts usually have a lot of "out clauses" that can provide for removal of the contract if a condition doesn't happen. If the person is not a close friend and you can't have a frank discussion with them about the situation then you really have no way of finding out the exact situation yourself.
2. It is not illegal or unethical for YOU to contact the listing agent to inquire if the property is still available for offers. It is also not illegal or unethical for YOU to ask a real estate agent working on your behalf to investigate the status of the particular property. It is the REAL ESTATE AGENTS who are under a legal and ethical obligation to inform you correctly of the status of the property and whether they can make or take an offer for it at this point. Were you to contact the owner directly, THE OWNER is under a legal obligation to fulfill the terms of any contracts they have signed, this includes the contract of sale and also includes any listing agreement that they might have signed with the agent representing them. Exclusive Right to List or Sell contracts (the ones you sign with the agent to sell your house) usually prohibit the owner from taking offers on their own. There are other types of contracts where the owner has the right to accept their own offers in addition to offers presented by their agent. If the owner does not have the right to accept offers on their own then they have the legal and ethical duty to refer you to their agent, if their agreement with the agent so specifies. Unless YOU are a lisenced real estate agent, you are not bound by any legalities in this situation. If the owner is not represented by an agent (eek) and has signed the contract, they would really need to examine the actual language of the contract and I still wouldn't advise them to break the contract without the advice of an attorney specializing in real estate law, as broken contracts can lead to lawsuits if you don't follow the letter of the law.
3.. The real estate agent that represents the owner of the property(the listing agent) should have advised the person whether the offer received was reasonable or not and offered advice as to whether the contract should have been accepted or not. If the person feels that they were poorly advised then they can contact the local authority that supervises the licensing or real estate agents to make a complaint.
2007-08-24 05:41:48 · answer #3 · answered by Anonymous · 1⤊ 0⤋
In short, it is completely legal and ethical to submit an offer on a home that has an offer.
The seller can elect to put your offer in back-up position. Basically, your offer becomes active if the first contract falls through.
It would be very smart for the seller to accept a back-up offer. A high percentage of deals are falling apart because of financing and tempermental buyers. They would have an ace in the hole if they had your offer, too.
2007-08-28 16:11:29 · answer #4 · answered by rochelletherealtor 2 · 0⤊ 0⤋
You can give them your offer in the event that the original buyer's financing falls through. They can NOT break their contract though, the buyer has to find fault with the house based upon inspection or something like that.
If I were you, I wouldn't put in an offer that's much more than the current offer, maybe $1,000 or $2,000 more. You have to look out for your best interest first and foremost - and you could always be wrong about the value of the house.
2007-08-24 07:03:08 · answer #5 · answered by Roland'sMommy 6 · 0⤊ 0⤋
you can always put in an offer and a back up.
2007-08-24 05:21:26 · answer #6 · answered by jeanniep 5 · 1⤊ 0⤋