Making Offers on Multiple Homes at Once

Making Offers on Multiple Homes at Once

Law book and gavel, real estate attorneyMaking offers on multiple homes is a tactic used by some buyers when the real estate market is “hot,” and they are unable to secure an acceptance for their offer proceeding one property at a time. It is possible to make offers on multiple homes, but it could expose the buyer to legal and financial risks. Moreover, some local laws prohibit buyers from making offers on multiple homes at the same time.

Legal Issues

Some cities and counties prohibit buyers from submitting bids on multiple homes by local ordinance. Furthermore, some there are laws which require parties to engage in deals in “good faith and fair dealing.” The good faith covenant requires parties to engage in contracts with the intent that the contract is fulfilled. Making multiple offers could be interpreted as a violation of that covenant. Finally, it could be interpreted as unethical to submit multiple bids because one or more sellers may rely on those extra bids and reject an offer from a different buyer.

Financial Risk

Each offer requires the buyer to submit “earnest” money to secure their bid. “If the buyer submits multiple offers and more than one is accepted, the buyer will likely have to forfeit the “earnest money” deposit or pay monetary damages to the sellers.”Also, each earnest deposit must be secured by a different payment method and the buyer must have enough funds to cover every earnest deposit submitted.

Possible Contingencies

It is possible, although unlikely, to make the acceptance of anyone offer contingent on the fact that other offers are not accepted or expressly rejected. This arrangement is unlikely because the seller is unlikely to agree to make any acceptance of an offer contingent on sellers of other properties rejecting the buyer’s offer. Without a contingency, it is possible that the repudiated seller will keep the earnest deposit and sue the buyer for breach of contract to seek damages. Before submitting multiple bids, the buyer should review every contract to determine the possible effect of making multiple offers.

Revoking Offers

One technique to avoid possible legal action is to revoke offers once one is accepted. However, the ability to revoke an offer depends on the terms of the contract. The buyer should be able to revoke the offer, but it is likely he or she may be forced to surrender the earnest deposit or pay monetary damages to the Sellers.

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