Dear Monty: Our offer was accepted after the first buyer backed out because they didn’t like the inspection report. We have already signed the contract with the seller and transferred the earnest money. The original buyer has resurfaced and wants to continue where they left off. The seller sent a mutual release to the first buyer, who never signed it. Our agent says we have the right to move forward, but the other agent says they are ahead of us. What is your opinion?
Monty’s Answer: A real estate company’s worst fear is having two accepted offers on the same property. Real estate companies are obligated in every state to treat all customers fairly. This rare event can and does happen. There are no excuses in this situation. The listing agent will have a difficult time finding someone else to blame. Even with a rational reason, the company is ultimately responsible for the acts of its agents.
The Unknowns
A few questions need to be known before one can accurately make a suggestion or render an opinion. Because of two accepted offers, it does not sound like a supervisor was involved. One question is: Who was involved? A second question is a wording question: How was the mutual release language written? A third question is: Was the listing agent working with the first buyer? More questions will arise as the facts emerge.The First Step
Consider deciding first if you are willing to defend your position. Do you want the house badly enough to invest the time that may be necessary? If you are ambivalent, how much money would you accept to assign your contract to the first buyer or sign a cancellation and mutual release?Once you have a sense of what you may do, consider immediately calling the broker of the listing company. Bypass the agents. Tell the broker the purpose of the meeting is to gather information (the answers to the questions in the unknown section above) so you can understand the situation. Don’t give away your thoughts. Take notes on a legal pad or notebook and date them. Your goal is to get an appointment today, so call the broker’s mobile number early. Try 7 or 7:30 a.m., as the broker is often the first in the office. The broker should be happy you are willing to talk. If the broker tries to put you off, try again to get in today.
Your Options If Your Contract Stands
No. 1: You go ahead and close. Life is good.No. 2: If they pay you a fee, assign your offer to the first buyer.
Potential Options If There Are Two Accepted Offers
No. 1: If they pay you a fee, assign your offer to the first buyer.No. 2: If the broker pays you a fee, assign your offer to the first buyer.
No. 3: If the broker and the first buyer pay you a fee, assign your offer to the first buyer.
No. 4: You can fight for the house and take your chances.
Several events that could occur here will change your options. Consider either you or your attorney taking the first step. Then your decisions will crystallize much earlier.
