Rental Property Investor · Gaithersburg, MD · Member since 2014 · 84 posts · 22 votes
Hello BP Community,
I'd like to get your opinion on a situation. I found a property that was marketed for sale while I was on a home inspection of another property just a few doors down the street. I contacted the selling agent personally and started working on the contract. Long story short, after a few backs and forth, and a long delay from the seller's agent (due to health issues), we finally got the contract signed. Just about 30 minutes after I send back the ratified contract to the seller agent, the seller agent emailed me back and said they are receiving multiple offers and ask me to send in the best.
My question is since I already have a ratified contract, could I still be outbid?
What are my options with the situation like this?
If I decide to settle with the seller to void the contract we are in now, what would be a fair dollar value to settle (we prefer to settle without any legal actions)?
Are there anything else I should be aware of? Thank you.
Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes
8y
@YiBing T. I'm having trouble following the facts, but it sounds like you received a counter from the seller with the seller signature, and you then changed the contract again, signed it, and sent it back. When you made a change to the contract, you effectively made it a new offer and the sellers signature is irrelevant. You do not have a contract.
If I'm reading it wrong and you did not make a change to the contract, and you signed the offer that was sent to you by the seller, you have an executed contract. Your options at that point are to enforce your rights under the contract, however at this point the contract effectively becomes as-is. The seller will not give you any credits or make any repairs in an attempt to kill the deal. Forget getting so much as an extension on your mortgage contingency so get your lending in order and ready to close on time.
To those asking about enforcing contract rights, there is a simple solution. You have the right to record the contract so it shows up on title. It creates a cloud on title the title company must address in order to close. The seller must provide proof the contract is no longer in effect or they cannot proceed to closing with a new buyer. Contact a local real estate attorney and they should be able to handle it.
Is this by any chance a HUD owned home? If so, they have sent out automatic highest and best disclosures to me in the past after we have signed a contract. The agent has to go into the hudhomestore website and fiddle with something and that triggered the auto-email. It upset me the first time it happened because it looked like it came from the same agent who I had just received the signed contract from minutes before. He assured me that we were still under contract and we closed without issues. I've found that many REOs send out automatic highest and best disclosures after offers are made, but HUD was the only one that sent it after signing the contract!
This is absolutely incorrect. There is no highest and best on a HUD home and the Listing Agent has absolutely no involvement in the bidding or accepting process. They actually have no idea if the number or amount of each bid. The agent receives notice of a bid acceptance at the same time as the selling agent
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
8y
@Tom Gimer@Russell Brazil This was the legal theory that my attorney talked about - that the offer itself could be considered the "thing of value", or consideration.
In my licensing course, the instructor told of a situation where the consideration was a pickup truck.
And further research on my part says Tom is right - that the promise to do something that the party is not otherwise required to do can be the consideration.
The EMD here is really not enough to deter anybody from defaulting anyway. It's normally only $500 or $1,000.
Portland, ME · Member since 2012 · 616 posts · 550 votes
8y
@Greg H. I have the emails asking for "highest and best" on HUD properties AFTER acceptance by HUD. This was a couple of years ago. I am not blaming the listing agent. Perhaps it was a glitch in the program.
@Greg H. I have the emails asking for "highest and best" on HUD properties AFTER acceptance by HUD. This was a couple of years ago. I am not blaming the listing agent. Perhaps it was a glitch in the program.
I believe you are referring to FNMA/Homepath Properties as this does not happen with HUD. They have never used a highest and best. Your offer is either accepted or you receive a generic counter(not really a counter at all).
@Greg H. I have the emails asking for "highest and best" on HUD properties AFTER acceptance by HUD. This was a couple of years ago. I am not blaming the listing agent. Perhaps it was a glitch in the program.
I believe you are referring to FNMA/Homepath Properties as this does not happen with HUD. They have never used a highest and best. Your offer is either accepted or you receive a generic counter(not really a counter at all).
Interesting and illuminating discussion. A couple of weeks ago I got beat out on a bid on a house that I would have sworn was a HUD house, in a request for "highest and best". Two years ago, I lost a HUD house to a higher bidder, but only after my bid was accepted/rejected (frustrating story that was 100% my fault) on its own.
Comparing the two situations, I now realize the recent bid was actually a FreddieMac house, not listed on the HUDhomestore website as the one was two years ago. I knew my recent bid was not on the site, but I kind of assumed it was an actual HUD home.