Who’s Most Likely to Get Bit: the Buyer or the Seller?
“What’s sauce for the goose is sauce for the gander.”
–Proverb
[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]
In today’s Seller’s market, which party — the Buyer or Seller — would seem to be the most at risk until there’s a fully executed purchase agreement?
Answer (at least mine): the Buyer.
The most common scenario?
After 6 offers and two days of negotiation, the Seller finally agreed to terms with their preferred Buyer.
However, someone literally missed dotting an “i” or crossing a “t” on the Purchase Agreement and — before the parties could correct it — another Buyer swooped in with a better offer.
That the Seller accepted instead.
All legal, by the way — which is not to say there wouldn’t be significant fallout and bad blood between the Seller, Buyer #1, and their respective agents and brokers.
(Un)Done Deal
Savvy Sellers would be wise to consider, however, that that legal blade can be double-edged.
So, I know of a recent, long-negotiated transaction in New York City — where deals are first verbally struck, then committed to writing — where the only outstanding term was a trivial difference in closing date (8 vs. 9 weeks).
Before the parties resolved the matter, however, another home the Buyer liked better came on the market . . . and they bought that instead!
“Bye, Bye, Seller #1!”
P.S.: According to Contract Law #101, you can’t unilaterally enter into a contract with someone.
So, in the above scenario, as long as there was no otherwise signed offer on the table with the Buyer’s preferred closing date filled in, the Buyer was free to move on.
By contrast, if there was such an offer on the table, the Seller arguably could have consummated the deal by agreeing to the Buyer’s closing date, then signing and delivering the contract.
Note, however, that a Buyer who wanted to preclude that risk would simply withdraw their offer, posthaste.
Ahhh . . . I miss contract law. Not. 🙂
See also, “Done Deal!” (or, is it??). How Home Buyers Know for Sure the Seller Accepted Their Offer“; “Written vs. Verbal Counter-Offers”; and “Purchase Agreements, Deadlines, and (Other) Ultimatums.”
