Home Buying in Newark>Question Details

A, Home Buyer in New Jersey

deposit accepted/attorney review thrus. /tues another higher offer accepted. legal?ethical?

Asked by A, New Jersey Tue Oct 2, 2007

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Justin's answer is very accurate, and it comes directly from Blair C. Lane, Sr., Attorney at Law, of Cherry Hill, NJ. URL Reference: http://www.njattorneyatlaw.com/CM/RealEstateLaw/The-Three-Da…

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Justin, Out of respect to all RE Pros and the public who participate, kindly remove this and any other plagiarized posts. Thank you in advance for your cooperation. In lieu of a copy/paste of another's original work, you could certainly reference this URL that you located that does a great job of explaining attorney reveiw by a NJ attorney. This would provide information for the public, adhere to community guidelines, show respect for the original author, be legally correct, maintain your personal credibility, and maintain the credibility of the Voices Board.
6 votes Thank Flag Link Tue Oct 2, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
In NJ, if you were still in attorney review--you don't have a letter from your attorney stating that you are "out of attorney review"--either party can withdraw from the transaction without reason. There are no legal ramifactions, no monetary ramifications. It is perfectly legal. It wouldn't matter why the seller backed out. Sometimes they do it for additional money, sometimes because the other party is a cash buyer (and the original had a mortgage contingency), sometimes because the closing date works better for them. It does happen.
Here's some advice for you for the next contract you write:
Request that your agent get the contract through attorney review in a day. Good agents know what attorneys can do the job for them. The only gliche is that the sellers' attorney and the buyers' attorney must have a good working relationship to do this.
I'm sorry you were not aware of how the process works. Don't give up. This market is a bit crazy like that. In my area of South Jersey, bidding wars have been back since December 06. I've both won and lost deals for my clients--some having to pay over asking price to get the home they want. It makes it doubly hard for buyers agents because with all the negativity in the media, our clients tend not to believe it is so. Next time have your agent check with the listing agent to see what the activity/status is before you put in your contract. The listing agent will usually have an idea if another offer is coming in or not. Good luck!
Web Reference: http://www.dianeglander.com
1 vote Thank Flag Link Wed Oct 3, 2007
Hi A,

I'm not sure I understand the timeframe of what you are asking, but I can tell you this: If the seller accepted your offer in writing (in other words, dated and signed the contract on which you wrote your offer and signed), he has a binding contract with you and cannot accept another offer without first canceling his agreement with you in writing -- even it is higher.

To cancel his agreement with you, it needs to be done within the allotted attorney/inspection review period (which should have been specified on the contract), or if a contingency went unmet (i.e., you were to obtain a mortgage within XX amount of days).

Without knowing more details, it's hard to advise you further. Would love to get more clarification!
1 vote Thank Flag Link Tue Oct 2, 2007
Patti Pereyra, Real Estate Pro in Chicago, IL
MVP'08
Contact
If you are still in attorney review you can accept another offer. Usually the first party to offer is given a chance to improve their offer, but it is not required.
0 votes Thank Flag Link Wed Oct 3, 2007
We had these type of question a lot when the market was roaring a few years back. You'd get 20 offers on a property and have to wade through the BS MAJOR OVERBIDS to get to the "real" deals. Realtor/Agents would regularly overbid in astronomical numbers simply so they could get a look see. You would find out later they had 3-5 offers going with the same client all over town. This by the way is fraud. Your not very specific but if the Sellers accepted subject to Attorney Review and another, higher offer is now on the table, they'll probably opt to disapprove your deal and go with the other one. Perfectly legal and ethical. This is the nature of the real estate transaction. Now if the agent is out shopping your deal to get a better price or to budge a relunctant buyer he represents--then yes, unethical but not actionable!
0 votes Thank Flag Link Tue Oct 2, 2007
If attorney review is not completed you can accept any other offer you wish without legal ramifications as long as your attorney voids the first deal out.
0 votes Thank Flag Link Tue Oct 2, 2007
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