|HOW TO GET DIBS ON HOME YOU WANT ... WITHOUT SELLING YOUR HOME|
Retiring to a New Lifestyle.
The Sterns recently took advantage of Florida’s low prices and bought a Townhouse for $100,000. They also wanted to buy in the Niagara area for its relaxed atmosphere, reasonable prices and convenience to the US Border. If they bought wisely, the sale of their home in Toronto would pay for the two homes and leave them with a nice nest egg.
Making an Offer and Walking Away with No Deal.
Within weeks, they found a bungalow in Niagara South, asking $259,900.Through Fran Dirksen, the listing salesperson, they offered $235,000 on condition they sell their GTA home. After a couple of offers back and forth and no deal, the Sterns decided to walk away, put their home on the market and try again another day. They asked to keep them informed on the home’s status.
One month later, the Sterns Accepted an Offer on Their Home.
They dropped in on Fran Dirksen prepared to make another offer on the bungalow. Fran explained that the property was now relisted with another brokerage and was still on the market. To confirm, Fran called the listing salesperson who said, “We did receive and discuss a written offer with the Seller who is on vacation in Florida. She has accepted the offer verbally by phone and has agreed to sign it on her return home in three days.”
By Approving One Offer Verbally, Can the Seller Choose from Two Offers, Placing the Accepted Offer in Competition?
With no signed acceptance, both agents believed that a second offer could be delivered, giving the Seller two offers to choose from once home. Disappointed, the Sterns decided to proceed with a competitive bid. While signing the Offer, the listing salesperson called back. She told Fran that she talked to her broker and the Seller’s lawyer. Both cautioned that because the seller had already verbally communicated the acceptance of a written and signed offer, she should not create a competitive situation, as this could place the Seller at risk legally. She asked that the 2nd not be submitted. The Sterns were upset. Fran voiced to her broker that this was extremely unfair.
An Accepted Conditional Offer Gives a Buyer Priority.
On hearing the story, the broker talked to the Sterns. “I appreciate your desire to buy the home for as little as possible. In your initial negotiations, however, had you negotiated and retained an accepted offer-- though subject to the sale of your home--you would now be in control of the situation. Any subsequent offer would have to be conditional on the Seller being released from your offer before it had any force and effect. The Seller cannot sell her home to two buyers.
“You decided to wait until you had an agreement on your home, to hopefully give you more clout in trying to buy the Seller’s home for less. You took the risk of another buyer coming along, which is what happened. Now that 2nd buyer has the priority position.
“While away, the Seller did accept a written offer verbally and communicated that she would sign it on her return. Unless the buyers have a change of heart, the Seller obligated herself to sell to the other buyer and could face a registered lien and legal claim were she to ignore her commitment. Our lawyer has confirmed this.”
The Sterns did happily purchase another bungalow.
** Courtesy of Century 21 Newsletter - April 2013 edition - Eugene Pilato