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So #2 could only be a back up contract, which would have been written in the contract.
A buyer who writes a backup contract realizes the deal may not work out. But on popular properties you may have two or three backup contracts. Hey, if the buyer wants to get in line, fine. You can never tell what might happen.
But, again, #2 could only have had a backup contract if you had a contract with #1.
To add to the discussion on verbal contracts, in at least some states, binding or not, realtors are bound (I'm told by the Code of Ethics) to present all offers. ALL offers. But signed and all initialed and ratified is what sticks.
If all counters and negotiations were done in writing, that would take a lot of time. A phone call or email is so much quicker and email also give a chain of conversation history.
Before it is signed by both parties there is no contract. Up till then it is only conversation, and conversation in real estate is just that.
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That said, you already have a buyer under contract in attorney review so you can't accept another contract as primary at this time. You can only accept it as a back up while you wait to see if buyer #1 is going to back out.
It depends on few factors. If you have countered, and there is a date for acceptance, it can only be a potential contract for that time period, and must be signed before the acceptance date, not just held till the attorney approves everything. If it has not been signed prior to that acceptance date, you can take another contract.
The way it was explained to me by my lawyer and realtor is buyer #1 has lots of contingencies. Per the contract, I had until December 2 to accept another offer. If I chose to do that, Buyer #1 has 72 hours to waive all contingencies. But when the offer from Buyer #2 was presented, my realtor made it sound like I had a clear choice between the two. He even said, "we need to decide which of these two buyers we want to go to bed with".
I hope I'm describing this right.... I'm so confused.
At any rate, Buyer #1's attorney has promised us a revised contract on Monday removing all contingencies and accepting the house "as is" with a new seller credit of $1k. So right now the only signed contract I have is what I described above, where I'm allowed to show and entertain other offers.
Why not just tell both parties about each others' offers (the price, not the cash vs financed, inspections, contingencies) and spark a bidding war and see who gives you the best offer, then pick that one?
Why not just tell both parties about each others' offers (the price, not the cash vs financed, inspections, contingencies) and spark a bidding war and see who gives you the best offer, then pick that one?
Not to speak for the OP, but she stated she didn't want to deal with inspection and financing contingencies again.
Not to speak for the OP, but she stated she didn't want to deal with inspection and financing contingencies again.
You hit it on the head. Buyer #1 has been through inspection and found things that they are willing to accept for a relatively minor credit (windows need to be replaced in a couple of rooms, flashing missing on the roof, and some seepage in the basement). There is a huge risk that Buyer #2 gets the same inspection report and wants me to give a larger credit for repair.
Also, Buyer #1 is offering to go to cash. Then I know I can close - hopefully within a couple of weeks. Buyer #2 has financing, probably wouldn't close until end of December/early January. I'm not sure if the risk of that falling through is worth the extra couple of grand a bidding war will gain me.
This is why I do ALL negotiations and agreements in writing. Here, verbal is worth the paper it's written on, and I've been bitten by that one once early in my career and don't ever want to be again. (There's some discussion about email.) With modern technology, Docusign, etc., it takes very little time to put it in writing, and I'm certainly getting paid enough to do that to assure the fewest potential problems for my client.
This is why I do ALL negotiations and agreements in writing. Here, verbal is worth the paper it's written on, and I've been bitten by that one once early in my career and don't ever want to be again. (There's some discussion about email.) With modern technology, Docusign, etc., it takes very little time to put it in writing, and I'm certainly getting paid enough to do that to assure the fewest potential problems for my client.
Negotiations in writing?
But, are "negotiations" whether verbal or written or email binding? Not here.
Only the agreement is binding, isn't it?
If I err in writing an offer, or telling my client that something is included and it is OK to go to contract, I cannot unilaterally claw the negotiated terms into the contract later, can I?
We palaver forever, and when it hits the page and is signed by all parties, that contract becomes the governing document for the transaction. Negotiation is just a step toward getting there.
I see some buyers who think they have the sellers' undivided attention because they are "negotiating." Nothing could be further from the truth, and signing off on negotiations would seem to muddy the waters.
All that said, I like email negotiations more than telephone, but the contract rules.
The way it was explained to me by my lawyer and realtor is buyer #1 has lots of contingencies. Per the contract, I had until December 2 to accept another offer. If I chose to do that, Buyer #1 has 72 hours to waive all contingencies. But when the offer from Buyer #2 was presented, my realtor made it sound like I had a clear choice between the two. He even said, "we need to decide which of these two buyers we want to go to bed with".
I hope I'm describing this right.... I'm so confused.
At any rate, Buyer #1's attorney has promised us a revised contract on Monday removing all contingencies and accepting the house "as is" with a new seller credit of $1k. So right now the only signed contract I have is what I described above, where I'm allowed to show and entertain other offers.
Look at your contract. If it says there is a kickout clause (the 72 hour period if you accept another contract) then you have a kickout clause, not a choice to accept either contract.
BUT first you have to negotiate the back up contract before it can go into place to be acceptable and a valid contract. That contract should say in it that it is a backup contract and note the 72 hours. In other words it has to be a real contract, truly acceptable for you to put it in next place. No going back and saying 'never mind'. (However, anything can happen with any contract so that the end goal might not come about.)
Then you/your realtor sends something in print to your purchaser/their realtor (not truly contract #1 precisely because you only have one valid contract from what you are saying) stating per the contract you are activating the 72 hour kickout clause which will now expire at suchandsuch time and date at which point this contract shall be null and void. Out of fairness, your realtor should call/text your purchaser's realtor as well in case he/she doesn't get to emails quickly enough.
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