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October 24, 2007
accepted offer
I had an offer that was called 'the accepted offer'. I brought in an inspector within 3 days of the accepted offer. As I tried to move forward with the purchase, I was told today by the broker that 'substantially higher offers have come in'.
I thought that after I was accepted and started the inspection, the property was moving forward as mine. I know nothing is set in stone til the contract is signed...but has anyone experienced such a thing before?
I'm out $600 on inspection for a place that just got swiped out from under me.
Comments
you should call the agents manager up and discuss with them that you were doing your due dilligence and that you would like her/him to talk to the seller to get them allow you to be the first to counter offer and that you were already in the process, that you are a ready and able buyer with a pre approval and all. Once an offer is accepted the seller can take another offer but if its explained to them the ethical reasoning behind how a deal is made maybe you can get another shot at it.. it can't hurt. However, ALL cash can be a deal breaker.. sometimes its not the agents fault and sometimes they have no idea what they are doing. so good luck!!! dont' hesitate calling the manager..
Posted by: guest at October 24, 2007 12:40 PM
OP. Thanks for the info.
The 'agent' is the owner of a 2-person company and she won't respond to my phone calls.
Posted by: oblinax at October 24, 2007 12:55 PM
That blows, sorry.
Posted by: guest at October 24, 2007 12:57 PM
Yeah, at least provide the initials.
Posted by: guest at October 24, 2007 1:07 PM
It happened to me earlier this year, made oral offer, it was accepted, got contract, had inspector there, signed contract with $50K check and then I hear that another offer was accepted and contract signed earlier the same morning my borker dropped off contracts at seller's atty office.
Out $750 bucks!!!
Posted by: bmfesq at October 24, 2007 1:11 PM
So i'm right?! This IS as evil as it feels. Has this happened to anyone else...and how do you prevent it in the future?
Posted by: oblinax at October 24, 2007 1:14 PM
Buyers put in offers and then back out leaving the sellers holding the bag too. If you put in an offer with a contingency you have to expect the seller is going to pursue their own agenda (which is selling the house to the first person willing for the most money possible). Ethically speaking, these people should sell you the house if you continue in good faith in a speedy way...but they are under no legal obligation. If you wanted to secure the house you could go into contract without contingencies.
Posted by: Mrs. Limestone at October 24, 2007 1:24 PM
Yep, there's no legal obligation but I think there's certainly a moral one. Same thing happened to me, only there were actually two contracts being worked on so I paid for the inspection AND lawyers fees. Owner was going to pick which contract came in with best terms. I balked and made a lot of noise until I got most (not all) of my money back.
Nothing you can do . . . except out the broker.
Posted by: Johnny at October 24, 2007 1:43 PM
Out the broker! Out the broker!
Posted by: guest at October 24, 2007 1:46 PM
I had the same thing happen too earlier this year -- it really sucks, but it's hard to avoid. It seems especially common with smaller brokerage outfits -- rather than wait and do a more reputable "best and final", they get the seller to accept an early offer, then use that as bait for more offers and ultimately back out when a higher offer comes in. The only way to protect yourself is to try and move into contract as soon as possible, I'm afraid.
Posted by: guest at October 24, 2007 1:49 PM
I understand an owner obviously accepting the best offer for his property but when someone pays for an inspection and takes the loss, that seems so unfair.
Posted by: guest at October 24, 2007 1:53 PM
"The only way to protect yourself is to try and move into contract as soon as possible, I'm afraid".
I guess that's my problem with it--i was never given a chance to move into contract. Only a week was spent between 1st open house, our accepted offer, inspection, our asking for contracts.
I believe the broker should have never called our offer 'accepted'. Broker should have said: 'you made a decent offer, but we will continue to accept bids. You are in the running. We will decide later" THEN we wouldn't have wasted money on an inspection.
Posted by: oblinax at October 24, 2007 1:57 PM
Discuss with selling broker and try to get your costs covered. If they really accepted your offer, and you moved speedily, they have an ethical obligation to make sure you don't loose a penny on this.
It happened to my wife and i when we sold a house that we got a higher offer while waiting for the buyer to sign his contract. Because the buyer had been so slow moving we called his broker and explained there was a better offer... he then rushed to match it and sign the contract. We were prepared to accept the other offer and cover the costs of the slow guy. We thought it was the right thing to do. Still do. Speak up, they may hear you.
Posted by: guest at October 24, 2007 2:10 PM
OP, it's 1.49 here. I agree, it's completely unethical and they shouldn't have accepted your offer (or ours) while they were still waiting for others to come in. We were also out of pocket $750 for the inspection. While it certainly takes time to get to the point of signing the contract, if you can push the seller to get you the docs asap, it can only help. Of course, the other problem then is you might have paid for a lawyer too before they pull the rug out from under your feet...
Posted by: guest at October 24, 2007 2:10 PM
It's hard to know who's responsible -- broker or seller. If broker is not returning your calls, maybe you could go by the house and explain situation to seller. Maybe broker did this w/o their knowledge and maybe they will reimburse you or have broker reimburse. Doubt it, but can't hurt to try. Sorry, that really does suck.
Posted by: guest at October 24, 2007 2:15 PM
I wouldn't want to work this a broker like this. Sorry to hear of your trouble. Please give us the name to save others from the hassles and the expense.
Posted by: guest at October 24, 2007 2:36 PM
yes please out the company at least - trust they wont do it again....
Posted by: guest at October 24, 2007 4:29 PM
No way the OP is going to out the Broker, not while they still have hope for getting the place or recovering their cash outlay.
Posted by: guest at October 24, 2007 5:15 PM
I would strongly advise against 2:15's advice. Do not contact the seller directly, that would be in poor form.
Posted by: guest at October 24, 2007 5:45 PM
As much as it's a shitty thing to do, it's totally legal and as you can see, happens all the time. Why out the broker? They are doing their job: getting the best and highest offer for their seller. They could've handled it better, by taking your calls to start, or letting you put in a higher offer, but that's the real estate game. You don't have the house until you close. A signed contract is binding, but deals fall apart even then.
That being said, everything happens for a reason. You'll find something better. You'll see.
Posted by: rh at October 24, 2007 6:04 PM
I don't think the seller could do much anyways. The house looks barely lived-in and perhaps not even inhabited anymore. I think it's an elderly owner.
Posted by: oblinax at October 24, 2007 6:05 PM
And...'the real estate game' as far as i've experienced it is all about pitting bidders against each other.
Again i say--take all the bids you want, make people outbid each other, fine. Just don't tell someone to come in and inspect the place til the bidding war is actually over.
Posted by: oblinax at October 24, 2007 6:09 PM
I disagree with rh. If broker tells buyer the offer is accepted, broker's ethics and the value of his/her word are on the line. As discussed many times here, many believe it is ok to keep showing the property as a back up following an accepted offer because, for a variety of reasons, deals do not always go to contract, and I have been shown properties on that basis. Brokers advised me at the showing that there was an accepted offer.
If the buyer is steadily moving towards contract, which OP appears to have done, then there is no ethical ground for rescinding the acceptance. If seller thinks can do better, he shouldn't accept the offer, and broker should be clear in advance with his/her client that that's what an accepted offer means. Buyer has now spent money (inspection) based upon the understanding that the offer was accepted. What OP describes here is not good faith on teh seller's or broker's part.
Posted by: slopefarm at October 25, 2007 4:19 PM
Actually, I think I ended up agreeing more than disagreeing with rh in my last post, as I read rh again, but just a bit more emphasis on the ethics. Sorry, rh.
Posted by: slopefarm at October 25, 2007 4:30 PM
Ethics are nice, but if there is nothing to back them up, they are often ignored. And while it is usually clear when a buyer is moving quickly to get an inspection and get into contract, sometimes the buyer thinks they are moving and the seller thinks they are not, or convinces self they are not when higher offer comes in. Sometimes buyers' attorney is screwing their client by clearly not moving at the normal speed to contract, and the buyer is unaware of this. Or buyer's attorney is trying, but board member of coop isn't returning that attorney's calls, because seller has accepted a higher offer and just hasn't told the first buyer until the second buyer signs a contract.
The only thing that would change this is if real estate sales were conducted as they are in most other places, where the offer is in the form of a contract binding on both buyer and seller, with contingencies to get out of it, and financial consequences for otherwise failing to proceed.
My sense is that we don't do this in NY because neither the buyers or sellers want to - they both gain the ability to change their minds for any reason from having the accepted offer be just a non-binding verbal agreement for the 2-3 weeks it usually takes to get into contract. Though it arguably serves the seller more.
And then, it probably serves the brokers the most. I've often noted how much easier their jobs are here - they don't have to draw up, present, and get contracts signed the way they do in other places - they just pass information around verbally (and now via email) on offers.
Posted by: guest at October 25, 2007 4:39 PM
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