Seller’s Options When Their House is Under Contract
Every so often, a seller will receive a superior offer after they’ve accepted a lesser one on their home. When this happens, the seller naturally wonders what their options are. This article will briefly answer that question.
First, it is important to know when a sale is final (at which point backing out of the deal exposes the seller to legal liability). A contract is generally final once the contract has been signed by all parties, so the seller wants to protect their interests if they believe they can get a better offer on their home. In California, the Seller has the ability to continue showing the home once an offer has been accepted, and to receive offers to place into a back-up position.
A potential buyer who has found their dream home, only to find that the home is under contract, has the option to make what is referred to as a “backup offer.” The backup offer is essentially an offer on the home in the event the current contract fails; buyers pull out of agreements far more often than sellers do. Many sellers prefer to work with potential buyers who have already put in some effort, so it’s not a bad idea on the buyer’s part to make a backup offer. Moreover, the back-up offer is the only type of offer a seller, who is under contract, can accept.
The main takeaway is this: if the seller thinks they may get a better offer down the road, then the seller should continue the show the property in the hopes of getting a back-up offer. A seller who is already under contract can accept backup offers, and can act on that offer if the current binding agreement fails to materialize.
If you are the lucky buyer that gets your offer accepted off the bat, and there is a back-up buyer waiting behind you, you should ensure you are performing all contractual obligations and meeting all timelines or the seller may take advantage of the back-up offer and cancel your escrow. However, as a seller it is good to know that the first offer is usually the best.
At the Chernov Team we understand that knowledge is power, and knowledge of the options available to a seller who is under contract is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.
