Can a seller receive another bid after signing a real estate contract with another buyer?
The seller had a bid on the property. I had a back up bid on the property The seller 1st bid fell through due to finances from the buyer. The seller then accepted my back up bid after several counter offers; we both signed the real estate contract. I didn't pay the earnest money on the property because my real estate agent told me she would get it @ a later date. I went out the next day and purchased a money order for the earnest money. Now the seller has chosen to go with the 1st bid because their finances are in order. Can the seller accept their bid even though he has already signed a binding contract with another bidder? If so please tell me what law this governs. The property is for the state of Alabama. This type of business really upsets me please help. Thanks, DP
- frak1a12345Lv 61 decade agoBest Answer
This is a dicey one!! The seller may claim that your lack of earnest money means failure to perform on your part and therefore no contract exists in spite of being signed thereby leaving him free to accept another offer. This is probably a question for a real estate lawyer.
- 1 decade ago
you dont need earnest money for a contract to be binding. the earnest money is so the seller will see "good faith" in part of the buyer. so if the buyer backs out the seller will recieve the earnest deposit. depending on the length of time between when you signed the contract and when the seller stated they accepted the other offer. if you signed contract yesterday and the next day you get the deposit and they say that they took the offer then you would have an argument . the only thing that the seller can do is accept a back up offer from that person in case you fall out. the seller could say that they would sell the property to the other buyer if you didnt get them the deposit by a certain date. usually all this stuff will be stated in the contract. if you signed a contract stating you would have the deposit by tomorrow but it took you three days then you breached contract and they have the right to sell the property to someone else. your realtor and his/her broker will have more info on how the contract was written
- Mr PlacidLv 71 decade ago
It depends on the terms of your agreement.
If your agreement contained an express condition requiring you to come up with the deposit before a certain time, and you were late, then the seller can rescind.
If your agreement was general, e.g. "Buyer shall provide earnest money of $XXX," then I certainly believe that providing the earnest money check the day after you signed the contract is reasonable.
If you feel strongly enough about it, consult a property lawyer, who may advise you to place a lis pendens notice on the property. But, in this market, with a 24+ month inventory of homes, you might be better off avoiding the aggravation and look for another home to purchase.
- Anonymous1 decade ago
Exactly what the other two posters stated. Anything can and does happen between the time one offer falls through and another offer is excepted by the seller. If you would have had the earnest money with the offer than it would be another story. Because your agent told you otherwise, you didn't get a chance. This happens more than you know.Source(s): 16 yrs real estate Title & Escrow Loans
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- godgedLv 71 decade ago
I agree with the above poster, depending on how your contract reads, you may not have a contract to purchase in place without earnest money or a promissary note that can be redeemed once both parties commit to the contract.
Read your contract and ask your Realtor. The Reltor may be able to fuss enough to get you back in first position.Source(s): Oregon Realtor
- Anonymous1 decade ago
airisthere is WRONG!!
In order for a contract to be binding, there MOST be consideration - no consideration with the contract, NO CONTRACT. Your agent screwed you.