November 8th, 2021 at 3:26 pm
Multiple Choice Question: Can the seller in that situation accept an offer from Buyer #2 before the seller and listing agent personally receive the SCO back signed by Buyer #1? Pick the best answer:
A. No.
B. Yes, but only if the seller receives Buyer #2’s offer after the seller sends out the SCO to Buyer #1.
C. Yes, but only if the SCO to Buyer #1 has expired or is withdrawn by the seller.
D. Yes.
Answer: Answer A is wrong. Paragraph 3 of the SCO specifically gives the seller the right to continue to offer the property for sale and accept another offer received before “acceptance” with Buyer #1.
Answer B is also wrong. Paragraph 3 of the SCO does say that the seller can “continue” to offer the property for sale, which does seem to imply that the seller must receive Buyer #2’s offer after the seller sends out the SCO to Buyer #1. However, the SCO does not restrict the seller in that manner. It’s just a matter of logic that a seller would not bother issuing an SCO to Buyer #1 if the seller plans to accept a prior offer received from Buyer #2.
Answer C is also wrong. The SCO does give 3 days to Buyer #1 to accept the SCO before it expires (see paragraph 2), but it also allows the seller to accept another offer in the interim (see paragraph 3). Moreover, the SCO does advise the seller to withdraw the SCO to Buyer #1 before accepting another offer, but it’s not a requirement.
Answer D is the correct answer. As a contractual party, a seller generally owes no duty to any buyer until after “contract acceptance” (except for the seller’s obligation to comply with anti-discrimination and fair housing laws). After all, the entire reason we focus on “acceptance” is because, before that moment in time, we do not have a valid contract, and the seller and buyer generally owe no duty to each other. Yet, immediately after that moment in time, we have a valid, binding, and enforceable contract that obligates both parties to perform.
-Thank you to Martha Mosier (President) for suggesting this week’s legal tip.
Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.
