Can a seller accept a higher offer?
The short answer is yes, but it isn’t exactly what you think. There are some circumstances that you need to consider and I’m going to break it down for you.
When someone asks me if a seller can accept a higher offer I am going to think they have an accepted offer. We’ll call that “accepted offer #1” – no let’s call that Jane’s offer.
If the seller is looking for another offer, they are look for a “backup offer”. The seller has the right to accept the backup offer and it can be higher or lower than Jane’s offer, but remember the seller has to perform on Jane’s offer they cannot just back out of it because they have a higher offer.
Most of the time a buyer backs out at inspection. So, let’s say Jane decided she wants to negotiate during the inspection and ask the seller for either money back or to fix things in the house. The seller can make the decision whether to keep moving forward with Jane or go to their backup offer.
If Jane backs out of the contract the backup offer can go into the Accepted offer position. Remember this can be a higher or lower offer than the first accepted offer and doesn’t have to have the same terms (dates and deadlines) as the first accepted offer.
In Colorado when we have a back up offer that is a legal binding contract, we have specific language that says just that, that they are in backup position and if the accepted offer back out, then the terms of the back up or 2nd offer go into effect.
The seller does not have to tell Jane that they have a backup offer.
It might not be in the best interest for the seller to start over with another offer, but it might. Remember part of an offer is not only the price but the terms.
In this tight market I would not be surprised if almost every seller takes a back up offer to protect themselves from the headache of putting the house back on the market if the first buyer backs out.
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