Expert: Jessica Bryan - 7/6/2005

Question
We have just listed a home on the market ourselves (without a realtor), We have already recieved one offer, however, it is $5000.00 below our asking price.  I have verbally accepted the offer, and we are signing papers tomorrow.  Today I recieved a full price offer.  
What do I do now?

Answer
Dear Dianne;
Here is a question of legality vs. ethics.  
A simple verbal acceptance is not legally binding; and I assume no money has changed hands which might imply more of an acceptance.  There could be things that are in writing that were not understood in the verbal agreement.  All things should be spelled out in a written contract signed by both parties. As a Realtor, I know that all agreements must be in writing to be enforceable.  So...you are within your rights to accept the other offer (full price offer).  However, there is the ethical nature of this issue that bothers me.  In many places, your word is your honor.  It is difficult to go back on your word.  So much depends upon the actual price of the home. If you are talking about a home that is less than $300,000 then $5,000 makes a difference.  But if the home is in higher price ranges then there is little difference between the two offers and by letting the buyers know that you could have accepted the full price offer but decided to do the right thing they may go easier on you with the inspections, etc.  

A couple of other suggestions might be that when they present the written offer, you write in a clause that limits the amount of repairs you will make to the home if the inspection report shows a need for repairs.  You can also write in that they must receive full loan committment by a certain date.  This way, you are assured that you are not taking your home off of the market only to find that a few weeks later you don't have a qualified buyer.  You can also take back up offers.  The first buyers may not accept these additional terms and back out of the deal leaving you free to accept the second offer.  

A second suggestion is to go back to the 1st buyers and tell them that in light of the fact that you have not signed the contract yet and that you have now received a second offer at full price, you would like to give them a chance to counter at full price.  You of course run the risk of making them angry but by dealing with the issue fairly and honestly you might come out just fine.  Make sure that they present a loan qualification letter with their offer so you know that they are able to go ahead with the purchase.

Good luck and best wishes.

Sincerely,
Jessica Bryan
Managing Broker
House to Home Realty Services