rarity: Home seller has multiple offers
I have multiple offers on my home. Can my real estate
agent accept a conditional deposit from a backup bidder in case the original offer
-- Minnie Sutors
First off, let me say that tens of thousands of sellers around
the country would love to be in your position right now. But they aren't -- and
That means you are in a position to call a lot more
of the shots in the selling process. And there's no law against demanding earnest
money from a backup buyer upon the execution of a backup contract, provided that
you make it abundantly clear that the house is under contract to another buyer
and that the backup is still second in line.
In the meantime,
that earnest money will be deposited with a third party, who can be an escrow
agent, attorney or even a bank in many states. With that done, no other actions
will be required of you until -- or if -- that backup contract becomes the primary
contract. Of course, you can't leave your trusty backups hanging. They will retain
the right to terminate that backup contract and get their earnest money back at
any point while they are still slotted in second-banana position. That simply
gives them the flexibility to jump on other home-buying opportunities.
might add that you're also in a position to request more earnest money than is
typical in your area, which you will collect in full if the primary buyer fails
to perform, as stipulated in the contract. With that many offers on your house,
you don't want to be left in a financial lurch by a time-wasting nonperformer.
(Of course, earnest money deposits should be viewed as backup protection only,
not a side business you start by finding loopholes in contracts.)
too, you may be party to a cat-and-mouse game here. Typically, sellers and their
agents would love to inform all potential buyers that there's a multiple offer
scenario in play to help create that desired sense of urgency. A backup bid, after
all, makes the primary bidder realize that they can't drag their feet in the process.
However, potential buyers often want to keep their own offers confidential and
may instruct their agents to help keep them that way. So be careful what you tell
other potential buyers about these offers! A seasoned agent should know how to
Here's something else to consider: You may have
priced your property too low -- perhaps expecting fewer or lower offers in the
wake of the national housing downturn. I can't tell where you are in the contract
phase with these buyers, but I would discuss the pricing issue immediately with
Good luck and may your highest offer be genuine.
ask a question of the Real Estate Adviser, go to the "Ask
the Experts" page, and select "Buying, selling a home" as the