It may seem unfair to buyers that a seller can accept a higher offer from someone else without responding to their offer first, but that's one of the few times the seller has the advantage. Most offers favor the buyer, but not in a seller's market.
A home buyer writes Realty Times:
"I need some advice on if my wife and I have any other measures we can take with a house we lost out on last week.
This house came on the market on Friday afternoon, 7/28, listed at $119,000. We got into the house 3 hours later, and bid the asking price of $119,000. There was a gentleman leaving the property as we were arriving, and we had a gut feeling he was going to bid as well. To make a long story short, the next day we found out that for one, we lost the bid to this other person.
But two, they had mistakenly listed the asking price and it was now $119,900. Apparently he bid over the asking price anyway, but I'm wondering, what are the rules on multiple bids and is this a seller's option to go into multiple bids or were we entitled to submit another bid of higher value?"
Thanks for your time, Barry
Realty Times responds:
The short answer is that the seller can look at as many offers as he wishes. Sellers are under no obligation to look at one offer at a time, and the offer they're considering isn't accepted until it's been accepted by both parties with all changes and contingencies initialed.
If the seller has accepted the other gentleman's offer, then they have a contract and both parties must abide by the terms of the contract. Your only move at this point is to submit a backup offer, in case his contract fails to go through for some reason.
And it just might, because offers fall through all the time. In fact, most real estate contracts generously favor the buyer by allowing them option periods to get inspections completed, get a loan approved, and sometimes to sell their homes before being obligated to close on the home they want to buy.
What you're experiencing, wherever it is that you live, is a seller's market. A seller's market can be as large as an entire region or as small as an extremely desirable neighborhood or street of homes. Sometimes a seller's market can simply be as serendipitous as two buyers wanting the same house at the same time.
What you didn't mention in your letter is whether or not you're working with a Realtor and if you made your offer directly to the seller or the seller's agent. If you had a buyer's agent, she would have worked closely with the seller's agent to make sure the seller saw your offer, and to come back to you to raise your offer if there were a chance that another offer were higher. Since this didn't happen, I assume that both you and the other gentleman made offers directly to the seller.
You can go back to the seller (or the seller's agent) whichever is more appropriate and ask if the home is under contract. If not, then sweeten your offer, and the home might be yours.
Also, make sure you prepared to buy -- sometimes contingencies are as important to a seller as the price. Are you prequalified to buy a home by a lender who has evaluated your credit? That could make a difference.
Next time, hire a buyer's agent and do what the agent tells you to do. Agents are hired to work on your behalf, and they don't get paid unless you close, so it's in their interests to get you the best deal possible. If they don't, you won't buy and therefore won't close, and then nobody gets what they want.
Hire a good agent -- someone with your best interests in mind.
