Are accepted offers legally binding? If the seller gets a 2nd, higher offer can they back out of the 1st deal? Our seller is trying to do just that..

Asked by Danielle, Tue Jul 26, 2011

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Scott Murphy, , 01876
Tue Jul 26, 2011
If the accepted offer is verbal, then there may be some latitude and means of escape. That's best worked out with a real estate attorney. If the accepted offer is in writing and the earnest money check has been deposited, then your sellers are definitely bound to the contract and can be sued for performance. This is a shady situation, but you still have to obey your sellers while abiding the law. That said, if there are issues which arise during the home inspection, then your sellers can refuse to negotiate or fix any repairs for the buyers and hope they are willing to walk away.

This same situation happened to me two summers ago. My sellers refused to fix or contribute to repair issues which came up during home inspection. The buyer still wanted the place so she decided to eat the repair cost and then she sued my sellers. The sellers eventually folded because they were staring down the barrel of having to sell their home anyway, plus paying damages including the buyer's attorney fees.

This happens all the time. You may go months without a single nibble and then you'll get three offers in a week - each higher than the last!
2 votes
Mikel DeFran…, Agent, Canton, MA
Wed Nov 23, 2011
Ron, be careful about making interstate assumptions. R.E. here in MA is much different than in other parts of the country. Yes, an offer is binding assuming you used the standard offer forms here in MA, consideration would have been specified as the intiial deposit. If it is all signed / not verbal they cannot back out of the deal. that being said, consult your atty regarding the offer and/or P&S.
Web Reference:  http://www.SuccessInMass.com
1 vote
Ron Thomas, Agent, Fresno, CA
Wed Aug 3, 2011
An OFFER is not a Contract:
For it to be legally binding, there have to be "considerations".
You should talk to a Lawyer for further info.
No, an Offer is not legally binding.
1 vote
Ted Duncan, , Brookline, MA
Tue Jul 26, 2011
You first need to look to your buyer agent.
Get the full scoop from them and ask your attorney.
Once you have a signed offer to purchase with a deposit check in Massachusetts, it is legal, binding and enforcable.
As Realtors we are not allowed to practice law, so ask your attorney for clarification on McCarthy vs. Tobin.
1 vote
Ted Duncan, , Brookline, MA
Fri Nov 25, 2011
Ron Thomas.
Do not ever answer another legal question in MA.
Bad. Bad advise.
McCarthy vs. Tobin.
0 votes
Stephanie Le…, Agent, Miami Lakes, FL
Fri Nov 25, 2011
An offer becomes a valid contract when executed by all parties of the contract and escrow is opened.

If your offer is fully executed and your deposit is being held in escrow then you have a binding contract.

If you have any questions regarding your transaction you should ask your agent to clarify the terms or seek the advice of an attorney.
0 votes
Heidi Zizza, Agent, Framingham, MA
Tue Aug 2, 2011
They cant back out if they signed the offer. If you have no signature you have no deal.
0 votes
Territory.c…, Agent, MA,
Tue Aug 2, 2011
If they signed the offer then yes it is legally binding ... If they verbally accepted the offer (or perhaps if you have it in writing via an email) you may have some kind of recourse but in both scenarios you would want to consult an attorney.

http://territory.com
Web Reference:  http://territory.com
0 votes
Gerard Carney, Agent, Spring Hill, FL
Fri Jul 29, 2011
If your offer was accepted and you went to contract, meaning all sides signed a contract, that paper is legal and binds them to sell to you unless you can not keep to all the provisions in that contract. Does not matter if the day after the seller and you signed the contract, they are bound to your offer and the sale is to be completed by Closing date. The seller should be alerted that if they in anyway try to do otherwise, that your attorney will go after them for completion of sale and any damages cause by their illegal actions!
0 votes
Oh Give Me A…, Home Owner, Waltham, MA
Wed Jul 27, 2011
Dear Kindly Hopeful Home Buyer:
Can a seller back out of a deal? Even if its legally not permissible, that doesn't mean that the seller won't still try to do it --- sometimes understandably so.
My experience, as a first-time home buyer, involved an attempt to back out of a signed P+S with deposit paid. I'm glad to say that ultimately, thanks to an excellent real estate lawyer, the seller and I were able to resolve the matter amicably.
After we had signed the sale agreement, the sellers were reportedly approached by others indicating they could get a higher price for the house. There were other expenses that also came up for the seller relating reportedly to prepayment penalties for their mortgage company.
It took my real estate attorney a few extra meetings and phone calls to sort out, but finally the sale did go through. Ultimately, I think the lesson to me was the importance of having expert guidance and being reasonable and flexible, if necessary, but also being firm about the importance of the commitment on both sides.
Home buying and selling can be stressful for all the folks involved. Hopefully, your situation can be rectified with a minimum of additional pain and suffering, and you can have your new home as planned.
0 votes
Louis Wolfs…, Agent, Needham, MA
Tue Jul 26, 2011
If it is an estate sale that needs the approval of the court, it is the courts obligation to accept the highest and best offer, prior to closing.
0 votes
Louis Wolfs…, Agent, Needham, MA
Tue Jul 26, 2011
A written accepted offer is legally binding. That said they can take a back up offer in the event the offer they accepted does not meet the terms that have been agreed to ie: passed the inspection, a satisfactory purchase and sales agreement, obtain financing.

Also to enforce an accepted offer You can sue for "specific performance", it is very time consumming and costly. Unless it is your dream house and at an exceptionally good price I would not pursue it.
Web Reference:  http://www.LouisWolfson.net
0 votes
Joanne Berna…, Agent, Northfield, NJ
Tue Jul 26, 2011
In a case like this, the best answer is to contact a real estate lawyer and have them read your contract. They can tell you what your legal standing is! It may be the best money you ever spent for a consult fee!
0 votes
Bobby Woofter, Agent, Boston, MA
Tue Jul 26, 2011
It also depends where you are in the paperwork process like people before me have mentioned. MA is a 2 contract state. There is the offer to purchase and the purchase and sale agreement, called the P&S for short. If you have the P&S signed then you have a lot more traction than if you only have the offer to purchase signed.
0 votes
Gerard Carney, Agent, Spring Hill, FL
Tue Jul 26, 2011
If it is a bank owned home or a short sale they can!
0 votes
Jessie Cuddy, Agent, Dorchester, MA
Tue Jul 26, 2011
Danielle, The short answer is yes as long as you have it in writing by all parties. If it was only a verbal acceptance, then no. It's not a binding contract.
0 votes
Tean Wong, Agent, Boston, MA
Tue Jul 26, 2011
Offer is signed, check is deposite then it's a contract.
0 votes
Gerard Carney, Agent, Spring Hill, FL
Tue Jul 26, 2011
Not if you have signed contracts! If they try to back out in contract, get an attorney and force the sale
0 votes
Jeffrey Cart…, Agent, Beverly, MA
Tue Jul 26, 2011
Hello Danielle,

Sounds like you have an unethical seller. It's best to speak with a real estate attorney. The attorney will most likely cite "specific performance" in order to get the seller to move forward with your deal. Your situation is rare but can happen.

If you need an attorney referral, don't hesitate to get in touch.

Thanks,

Jeff
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Jul 26, 2011
Danielle it depends if your offer was signed by the seller and any changes initialled by all. If our offer was accepted verbally, it may not be binding, if it was accepted in writing by signature, the only out they may have is any contingincies you put in your contract such as a home inspection or mortgage contingincy.
Web Reference:  http://www.ScottSellsNH.com
0 votes
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