Dear Real Estate Adviser,
My parents promptly put an offer on a condo in a coastal area and it was returned with a counteroffer, which my parents accepted. But apparently, someone undercut them at the last minute and got the condo.
Do the sellers have the right to change their minds just because they received a better offer, even after the price was accepted by both parties?
-- Bessie C.
Alas, real estate is all about "better offers." That doesn't mean your parents were not slighted in this deal -- or nondeal, as it turns out. Typically, when the seller accepts the buying party's signed offer or counteroffer, then communicates that acceptance to the buyer personally (or through a real estate agent), a binding agreement has been made.
However, offers and acceptances usually have to be in writing and signed by each party agreeing to the contract. Did your parents sign and return their accepted offer to the seller in a timely manner? If not, the seller may have found a legal "out" when that better offer rolled along.
There is also a chance that any number of other things may have occurred to "squirrel" the deal.
For example, the sellers may have retained some form of contractual latitude to sell to another party within a given time frame and/or put an expiration date on all offers.
Or, the sellers' "listing" agent -- assuming one was involved -- may have been the weak link in the communication chain by failing to diligently work to get the buyer's acceptance form back to the owner, perhaps intentionally. This is quasi-legal, but is treated more like an ethical breach than anything else.
Granted, matters of price differences are often exchanged verbally in real estate deals. However, anything short of a signed agreement skates under the statute of frauds litmus test in most states. A written exchange of counteroffers and acceptance is always better.
Even if there is evidence the sellers didn't have a clear legal right to back out on a deal, know that this happens all the time. The fact that your parents were first in with their offer and were probably led to believe they were in the driver's seat doesn't change anything.
Your folks could certainly consult with a real estate attorney or similarly qualified professional. But they'll probably learn that legal redress against a seller can be expensive and time-consuming and likely fall short of a satisfying conclusion.
There is hardly ever a strict punishment for reneging, as opposed to the old "Mad Max Beyond Thunderdome" movie dictum: "Bust a deal and face the wheel."
I suspect there'll be plenty of discounted condos for sale in the area where your parents are looking. To avoid being hamstrung again, I suggest they look at a variety of units and perhaps settle on three they like -- then start the counteroffers.
Good luck to you and them!
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