Congratulations, you’ve gotten a contract on your house! But wait, someone else makes an even better offer. Can you accept it?
Once you sign a contract and earnest money has been paid by the buyer, an enforceable contract is in place. You cannot break it without penalties. The buyer can sue for enforcement of the contract, forcing you to go through with the deal. Barring the current deal falling through for other reasons, such as inspection results, you are committed.
Inspections can trigger a failed deal. If a buyer wants you to make price concessions for repairs, you can refuse, forcing the buyer to accept the house without the repairs or concessions, or walking away from the deal, as most contracts provide. This frees the seller to move on to a better offer.
One word of caution: The home must appraise high enough for that second offer to go through. If not, the buyer is then left with three choices: coming up with more money out of his own pocket, asking you, the seller, to lower your price, or walking away from the deal. In other words, a better offer is great news, but the sky is not the limit.
Negotiations mean nothing without a signed contract. Until there is a signed and executed contract and an earnest money check has been received, a seller is free to consider and select a second buyer’s offer.
Before you even list your home, be proactive. Find out if your state’s standard sales contract allows you to accept backup offers. This is especially important if you’re selling a desirable home in a hot market. If so, strategize with your agent about the possibility that this might happen. If you have a backup offer waiting in the wings and your first buyer withdraws, you will be able to roll right into your new deal.