The benefits of a hot real estate market nationally, and locally in Forest Lake and White Bear Lake and the surrounding towns are both big opportunities and big risks. This article addresses the issue of how to best handle multiple offer situations and counteroffers.
As an initial step, all offers to buy and sell real estate must be in writing. If not, the Statute of Frauds affirmatively defeats a claim to enforce the sale of real estate under a verbal agreement. Do that through a series of writings capturing the essential terms may satisfy the writing requirement. That is, you do not have to have a single, comprehensive writing in order to have a written purchase agreement.
Beyond that, consider this very real and likely situation. Seller gets an offer from Buyer 1, but does not accept the terms. Seller sends Buyer 1 a counter-offer proposing new terms, but the counter-offer does not include an expiration date or time. After the counter-offer is sent to Buyer 1, Buyer 2 sends Seller an offer, the terms of which are superior to the counter-offer sent by Seller to Buyer 1.
At this point, there are 2 live, acceptable agreements. The peril is that Seller has the opportunity to accept Buyer 2's terms, while Buyer 1 has the opportunity to accept Seller's terms --- and each of these can happen without any of the parties knowing what anyone else has done.
Seller is at the greatest risk. Supposing Seller wants to accept Buyer 2's terms, Seller's best course of action in this situation is to affirmatively cancel in writing Seller's counter-offer to Buyer 1, then accept Buyer 2's offer. Seller does NOT want to get caught in a spot where Seller accepts Buyer 2's offer, then before canceling the counter-offer to Buyer 1 learns Buyer 1 accepted the counter-offer. Now Seller 1 has 2 valid purchase agreements for the same property, and a massive litigation nightmare without a good end result in sight.
Also in this case, if Buyer 1 proposes any terms difference from the counter-offer, Seller's counter-offer is deemed withdrawn and cannot be accepted. Similarly, if Seller proposes different terms to Buyer 2 compared to what Buyer 2 offered, Seller cannot accept Buyer 2's offer as written, unless the same terms are re-offered.
You can only sell your house to 1 party. Multiple offer situations are great, stressful, and an invitation for problems. Avoid problems by taking the proper steps in the proper order, communicating withdrawals in writing, and including expiration dates and times on your offers. If something goes sideways or you have any questions on how to handle this, call me any time and let's safely navigate you through the situation.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney. All information contained in links are the property of the linked site.