Dear Kari,
My wife and I are finally ready to purchase our first home.
We have been scrimping and saving for so long, we thought we’d be renting a one-bedroom apartment forever.
We know that this is a great time to buy with low interest rates and a lot of homes on the market. I want to make sure we get a great deal.
Our friends suggested we use the same method they used when they recently purchased their home.
Instead of making an offer on a home and seeing if it gets accepted a few days later, the system they used was making several offers on several different homes at the same time, until they got a seller to sign one of their offers.
My wife and I would like to know if this practice is even legal.
Answer:
There is no law which prevents you and your wife from doing what you want and offering on as many homes as you like.
However, by submitting multiple offers you are misleading the sellers unless you intend to buy more than one property or fully disclose what you are doing.
Of course, by disclosing your method to the sellers makes your offer extremely unattractive. Some sellers may elect not to even consider counting your offer especially if they have news of another possible offer.
An accepted offer to purchase is a legally binding contract and requires a deposit. Please note that just because you have made offers, they are not legally binding until the seller has accepted and signed the offer also.
If you place an offer on three different properties and all three of them are accepted before you can withdraw two of them, then this could possibly be a situation in which you have signed to buy three separate homes. There are many ways to handle this scenario properly.
For instance, if two offers are made on two different homes and both of the sellers accepted both of them before you could withdraw from one, then you could be legally bound to purchase both homes.
There are many ways back out of a contract but you may run the risk of losing your deposit money and having one big headache, to say the least.
One idea that might help out: Shorten up the seller’s response timeframe to get back to you with an answer once your offer is submitted to the seller.
The seller’s choices are: accept it, counter it or reject the offer. With this shorter response time from the seller, you can take it off your mind and go onto the next home.
I understand wanting a “good deal.” After all, who wouldn’t? Good to know that there are more things to consider when buying a home than just the price.
What is a good deal to one buyer may not be a good deal to another buyer.
There are several things to consider when looking for a home: area, proximity to your work and family, schools, too much traffic, proximity to power lines, homeowner’s dues, CC&Rs, commercial or residential zoning, is it in a flood zone and so on.
Additionally there is the condition of the home to include how large the home is with the number of bedrooms and baths, size of the lot, if the foundation is sound and the roof solid, are there are termite issues, mold issues, etc.
Make sure you write down everything you want. Once you’ve discovered an area you like and can afford, then have your Realtor pull the data from the MLS system and look at what the homes have recently sold for in that particular area in which you are hoping to live in.
If there is a large difference between what similar homes have actually sold for and the price you are hoping to obtain a home for, you may find you are in what Realtors call “fantasy land.”
This is not a fun place to hang out in for too long because then “reality land” might hit you even harder.
Rely on your Realtor’s experience to help you understand and obtain that “good deal” specific to your needs. Happy hunting.
This is not intended for legal advice. Pease contact your local attorney for legal advice.
Kari McCoy owns the Kari McCoy Group, residential real estate at Lyon Real Estate. She can be reached at (916) 941-9540 or email her at sold@karimccoygroup.com.
