When you have a house to sell, getting multiple offers is a good thing. It suggests you're well on your way to selling your home and moving on to whatever big plans await you. But offers aren't always what real estate agents call "clean." They often include conditions, and those conditions make it possible to accept more than one contract to sell your house -- and yet still not sell it.
The Regular Process
Once your home goes on the market, would-be buyers come through to check it out. If they like what they see, they write up an offer and send it to you -- or, usually, to your real estate agent. There may be some back-and-forth negotiation, but in the end, if the deal is satisfactory, you accept the offer. At that point, the offer becomes a contract -- a binding agreement to transfer ownership of your home -- and you can move on to the important things, like figuring out who's going to help you move and deciding if you can just caulk over that nail hole or whether you should put a dab of paint on there, too.
Many offers are subject to conditions, called contingencies. The most common contingencies are routine, are fairly minor, and don't gum up the works: The house has to pass an inspection, an appraisal has to confirm that the house is worth the selling price, and so on. But some are huge, with the whole deal hinging on a fairly major step in the process, like the buyer obtaining financing. In slow housing markets, contracts may include a "subject to sale" clause. That's a contract that says, "I promise to buy your house ... if I can find someone to buy mine."
Accepting Contingent Offers
You can accept multiple offers on a house -- and therefore have more than one legally binding contract -- if the contracts are all contingent on the buyers selling their own homes. It then becomes a race: The first one to sell, gets your house. (However, if you're in a market slow enough that you're getting multiple subject-to-sale offers, it may not seem like much of a "race.")
Contingent contracts typically include a right-of-first-refusal period of 24 to 48 hours. If a "clean" offer for your home comes in, the contingent buyers have 24 to 48 hours to remove the contingency and move forward with actually buying your house in accordance with the rest of the contract. In a subject-to-sale situation, they usually won't be able to, since if they had that kind of bread they wouldn't have tried to feed you a contingent contract in the first place. If you have two contingent contracts, the first one you received gets first priority. If that buyer can't make good, then the second buyer gets the chance. If that buyer can't do it either, then you can -- finally -- sell the house to the person waving real money at you.
- Brand X Pictures/Brand X Pictures/Getty Images
- How to Make a Contract for Work to Be Done on Your House
- Can a Seller Have Two Contracts on the Same House?
- How Does Price Elasticity Affect the Housing Industry?
- Advantages & Disadvantages of Living in a Single Family House
- Residential Remodeling Vs. Building a New Home
- How to Save Money to Build a House
- Bathtubs vs. Shower Stalls in the Sale of Houses
- Can I Use 401(k) Funds to Build a House?
- How to Find the Perfect House With a Small Budget
- How to Make a House More Sellable