Every time the market gets crazy, like it has been recently, the possibility exists for a purchase to turn into a bidding war. This is always stressful for the anxious buyer because it causes them to stretch further than they wanted in order to prevail. The seller is usually the winner in this scenario because they have the luxury of choosing from more than one offer. The record number of competing offers reported on one property in the Seattle area this year was over 150 in the first few days of the listing. Our region is not experiencing a hyper market like that, but in many cases when a local property listing hits the market there are multiple offers. The market’s upward swing has slowed recently, maybe because buyers are exasperated from the stiff competition and are taking a summer break.
In one recent case a seller rejected a full price offer because they expected a bidding war which never materialized. The seller in that case may have placed themselves in a legal predicament. This begs the question, does the buyer have recourse? Assuming the offer matched the sellers listing price and other terms that would be normal and acceptable to sellers, could the seller be forced to accept this full price offer since they had advertised it to the public for that price? The answer to that question is no,… unless the seller rejected the offer based on a biased response to the buyers race, religion or other classification that violated the State or Federal Fair Housing regulations. The seller has the power to sell the property or not,… and the power to change their mind so long as they have not entered into a binding contract or discriminated against a protected class.
The legal rub may come from the broker’s side of the equation since that seller did enter into a legally binding contract with their broker. Most Exclusive Right To Sell listing agreements have the general provision in which the seller basically states, “I will pay you a commission if you bring a ready, willing and able buyer at the listed price or other terms acceptable to me.” In other words, the seller in this case would be obligated to pay the broker even though the sale was never consummated. I don’t know too many brokers in our small town (Spokane and surrounding towns) that would enforce this contract, since they would likely cross paths again and may not want to create ill will.