Accepting back-up offers
There is a designation on the Multiple Listing System (MLS) of a little red contract and the letters ACT in red. It means, "the seller is accepting back-up offers." If an Offer to Purchase (or a Purchase and Sales Agreement) has already been signed, how can a Seller accept a different offer?
The Seller can’t. There is a problem with language. If there is an Offer to Purchase or a Purchase and Sale Agreement signed between the Seller and the Buyer, the Seller cannot unilaterally dump that contract to make way for the back-up offer. The Seller can collect other offers, but the Seller cannot accept one.
However, if the Buyer tries to change something in the existing contract, the Seller has another offer waiting in the wings. So, after home inspection, it is take-it-or-leave it. After the Purchase and Sales Agreement is signed, the Buyer could be dumped of needing an extension on the mortgage contingency.
I am a buyer’s agent. I advise my buyers to stop house-hunting once their offer is accepted. I think a seller who collects back-up offers is like a buyer who keeps house-hunting. Why muddy the waters? It’s like dating when one is engaged.
Sellers, did you instruct your agent to continue to market your property after you signed an Offer to Purchase? After you signed a Purchase and Sales Agreement? Until mortgage contingency? Until closing day? Why?
