Honor deal or accept higher offer?

[MOXJO7282]

So I listed a week for sale and accepted an offer. I sent a purchase agreement for review but it has not been signed or no money has been exchanged.

Just this morning someone who expressed interest earlier increased their bid by $2k above the person I had come to terms with. With my portfolio some may have a misconception about my wealth but the fact is I'm like most everyone else with a sick wife and kids in college or soon to be so the extra $2k would be huge for us.

I would really like to accept the lower offer but the fact is with a wife with health issues and one kid in college and another soon to be It's hard for me to pass up that extra amount.

If I accept the higher offer I don't think I'm violating any business ethics because a deal isn't done until ink is on paper but I'm struggling with the decision because I don't want to be unfair to lower bidder but my over-riding thought are my family's best interest which would be accepting the higher offer.

What would most do if you were in my shoes?

 

[presley]

What would most do if you were in my shoes?

I would tell the first person that you've been offered $2K more and that you want to take it if they can't return the signed agreement and pay in the next 24 hours.

 

[ThreeLittleBirds]

I agree w/ Presley. Bird in hand.

Also, there is nothing stopping the higher bidder from changing his or her mind after the fact.

 

[pacodemountainside]

Generally contract states have say 24-48 hours to sign to minimize shopping.

If more than 48 hours I would go with new offer.

 

[csxjohn]

I too would be tempted to take the higher offer but I would do what Presley suggests.

I come across this often on my Craig's List sales and to me it's important to be fair to the person I'm currently dealing with. I know it's a smaller amount but I have principles I live by.

I would give them a shout and let them know that you're going to the next person if they don't act in X number of hours. Like TLB says, no guarantee the other party will follow through.

 

[theo]

Not enough info...

I see no mention of how long the prospective buyer has actually had the purchase agreement in his / her possession (...if at all yet) in order to sign and return same.

Has the paperwork been confirmed as having been successfully received? A buyer can't possibly sign and return that which has not yet even been received.
If already received, I'd be inclined to inform buyer of this new development and give buyer 48-72 hours to deliver back to the OP a signed agreement and payment.

There is no guaranty the "second in line" buyer will actually come through either, increased offer figure notwithstanding. In the end, money talks and chit chat walks.

 

[MOXJO7282]

I see no mention of how long the prospective buyer has actually had the purchase agreement in his / her possession (...if at all yet) in order to sign and return same.

Has the paperwork been confirmed as having been successfully received? A buyer can't possibly sign and return that which has not yet even been received.
If already received, I'd be inclined to inform buyer of this new development and give buyer 48-72 hours to deliver back to the OP a signed agreement and payment.

There is no guaranty the "second in line" buyer will actually come through either, increased offer figure notwithstanding. In the end, money talks and chit chat walks.

I sent him a draft of the purchase agreement and less than 24 hours later this new offer came in. I immediately sent a note to the first buyer apologizing and explaining the situation. I gave him the opportunity to match if he wants but he may think I'm playing him and walk away. I'm anxiously awaiting his reply.

 

[ondeadlin]

From a strictly legal standpoint, acceptance of an offer has nothing to do with signing anything. If I say to you, "I'll give you $500 for your watch," and you say, "I accept," you could technically sue me to enforce that oral agreement.

Now, only you know the exact facts behind this situation, and it's very unlikely anyone would actually sue you to enforce such a deal ... but if you told the buyer you accepted their offer, you might want to consider whether you've got some exposure there.

Just something to consider ... not legal advice.

 

[vacationtime1]

From a strictly legal standpoint, acceptance of an offer has nothing to do with signing anything. If I say to you, "I'll give you $500 for your watch," and you say, "I accept," you could technically sue me to enforce that oral agreement.

Now, only you know the exact facts behind this situation, and it's very unlikely anyone would actually sue you to enforce such a deal ... but if you told the buyer you accepted their offer, you might want to consider whether you've got some exposure there.

Just something to consider ... not legal advice.

Except that contracts for the sale of real estate must be in writing. So saying "I accept" is inadequate for this particular type of contract.

If it were me, I would tell the first buyer that I had another offer and that he had 24 hours to get the signed contract back to me -- without mentioning that the second offer was at a higher price. Otherwise, it might appear that I was using a phantom buyer to push the price. But after 24 hours + one minute, I would send a contract to the second buyer (at the higher price) and deal with whomever got me a signed contract first.

 

[ondeadlin]

Except that contracts for the sale of real estate must be in writing. So saying "I accept" is inadequate for this particular type of contract.

Completely true - but that doesn't mean you couldn't find yourself in a fight about it with a less sophisticated party. Happens all the time.

 

[vacationhopeful]

In my state, real estate transaction can ONLY be ENFORCEABLE via a written agreement. I am NOT A LAWYER - but might also have some level of compensation paid to show intent.

I once was trading a HOUSE (exchanging my house for their house) with each of our mortgages being assumable. The other party (H&W) would not sign the paperwork - we lived across the street from each other - I HAD to sell & they just wanted to sell. It was a long 3-4 weeks until the settlement date.

We all arrived at the title office being done one after the other, and the title clerk lean over and ever so slightly asked, "Did we have sign agreements yet?". I said NO and she got this sick look, but the other couple had brought along a lawyer, who told the title clerk, that as long as all parties had agreed to the terms as they understood and signed the deeds, she could transact the deal ... it is the ENFORCEABLE issue, but willing parties can verbal agree to the terms and sign the deed over to an accepting party.
=================================================

Joe,

PERSONALLY, I have notified the FIRST BUYERS to return the signed paperwork within 5-10 days with your required PAYMENT (or a deposit, per that paperwork); else, you may withdraw your sales proposal and offer the property to other interested buyers.

If I was your first buyer and you email me or called me 24-36 hours (after emailing me a contract to execute) with your NEW PRICING OFFER, I would tell you to "GO FISH".

Sorry, $2,000 is real money to me also ---- but as I have said to other persons who have welch on an OFFER I made or accepted ... "I now know the value of your word".

ADDED: Joe, I really try to honor written offers (emailed out a contract after their verbal acceptance) I put out to a possible renters ... SueDonJ was more HOW I would have emailed the other party "in tone". You emailed him a contract to return with payment -- I always include a DROP DEAD date for that paperwork. And it is a true balancing act getting MONEY NOW and understanding I don't want them shopping "my offer" to get a lower bid. And also, the inbound date ... some those include my demand for IMMEDIATE PayPal payment to me.

And renters who KNOW they got a VERY GOOD DEAL .. they express (overnight) mail the contract with certified funds to my PO Box.

 

[Passepartout]

In Real Estate dealings I've had, until a sales agreement is signed, AND some 'earnest money' has changed hands, the property is still available to the first bidder to monetarily express desire for it.

I think I'd tell buyer #1 to fish or cut bait. Show the color of your money within ( time certain)

Jim

 

[SMHarman]

From a strictly legal standpoint, acceptance of an offer has nothing to do with signing anything. If I say to you, "I'll give you $500 for your watch," and you say, "I accept," you could technically sue me to enforce that oral agreement.

Now, only you know the exact facts behind this situation, and it's very unlikely anyone would actually sue you to enforce such a deal ... but if you told the buyer you accepted their offer, you might want to consider whether you've got some exposure there.

Just something to consider ... not legal advice.

Offer, acceptance, CONSIDERATION (money)

Anything else is an invitation to treat not a contract.

 

[MOXJO7282]

So 1st bidder understood my situation and backed out. He wasn't surprised because he had said I was selling it cheap but was disappointed it didn't work out.

The 2nd buyer it turns out is an attorney who has 12 of these units and is in the rental business.

 

[SueDonJ]

I sent him a draft of the purchase agreement and less than 24 hours later this new offer came in. I immediately sent a note to the first buyer apologizing and explaining the situation. I gave him the opportunity to match if he wants but he may think I'm playing him and walk away. I'm anxiously awaiting his reply.

I would have let the first buyer know that a higher offer came in quickly after you'd accepted his, and given him a deadline by which to return the signed contract at the same price originally offered/accepted. Presley said 24 hours, I would have given up to 48.

{eta} Now I see that the buyer backed out. I probably would have too if I'd made an offer in good faith that was accepted, but then was told almost immediately that I couldn't have it unless I increased my offer.

There really are very few people who aren't dealing with "situations" routinely, and I feel for you with yours. But an agreement is an agreement. IMO this doesn't reflect favorably on you despite the fact that it all may adhere to the letter of the law.

 

[ondeadlin]

Offer, acceptance, CONSIDERATION (money)

Now we're back in Contracts I ... executory consideration, I believe? ("the promise of a money payment or service in the future is just as sufficient a consideration as payment itself or the actual rendering of the service.")



(But, again, irrelevant given that it's a contract for land ... except for the threat of a wrongful suit)

 

[bogey21]

Personally I would have honored the deal with the first buyer. It is in my genes. Way back in my working days I used to trade bonds (in the millions of dollars). When I (or the other party) would say the word "Done" no one ever went back on their word.

George

 

[letsgosteelers]

I sent him a draft of the purchase agreement and less than 24 hours later this new offer came in. I immediately sent a note to the first buyer apologizing and explaining the situation. I gave him the opportunity to match if he wants but he may think I'm playing him and walk away. I'm anxiously awaiting his reply.

I think the draft/offer should have contained language that you need to have signed paperwork within 24-48 hrs, whatever is reasonable or something stating that other buyers may be reviewing / or have received purchase agreements as well and that first money to be received in escrow would be considered the winning offer.

If it was such a great deal, someone would jump on it right away and not dilly dally.

We also don't know how this was advertised. An ebay auction would have solved this problem, obviously the highest bidder would have won. If first party failed to complete the deal based on the terms then the next party could be offered the deal.

Lots of issues with this one but jacking the price / changing the terms on the first party w/o having had a chance to respond was not good form.

just my .02

 

[comicbookman]

I think the draft/offer should have contained language that you need to have signed paperwork within 24-48 hrs, whatever is reasonable or something stating that other buyers may be reviewing / or have received purchase agreements as well and that first money to be received in escrow would be considered the winning offer.

If it was such a great deal, someone would jump on it right away and not dilly dally.

We also don't know how this was advertised. An ebay auction would have solved this problem, obviously the highest bidder would have won. If first party failed to complete the deal based on the terms then the next party could be offered the deal.

Lots of issues with this one but jacking the price / changing the terms on the first party w/o having had a chance to respond was not good form.

just my .02

I agree. Had this happen to me as a buyer. Agreed to terms via PM and email, waiting for contract (it was 4th of July weekend, so contract supposed to arrive Monday) and then seller came back Sunday with, I have a higher offer , will you match it. It was only a couple of hundred, but I refused as it made me distrust the seller. It's just not cool. If I had been sent the contract with a short return time frame, that would have been fine. I was brought up to believe that your word is your word.

 

[csxjohn]

I would have let the first buyer know that a higher offer came in quickly after you'd accepted his, and given him a deadline by which to return the signed contract at the same price originally offered/accepted. Presley said 24 hours, I would have given up to 48.

{eta} Now I see that the buyer backed out. I probably would have too if I'd made an offer in good faith that was accepted, but then was told almost immediately that I couldn't have it unless I increased my offer.

There really are very few people who aren't dealing with "situations" routinely, and I feel for you with yours. But an agreement is an agreement. IMO this doesn't reflect favorably on you despite the fact that it all may adhere to the letter of the law.

Personally I would have honored the deal with the first buyer. It is in my genes. Way back in my working days I used to trade bonds (in the millions of dollars). When I (or the other party) would say the word "Done" no one ever went back on their word.

George

I think the draft/offer should have contained language that you need to have signed paperwork within 24-48 hrs, whatever is reasonable or something stating that other buyers may be reviewing / or have received purchase agreements as well and that first money to be received in escrow would be considered the winning offer.

If it was such a great deal, someone would jump on it right away and not dilly dally.

We also don't know how this was advertised. An ebay auction would have solved this problem, obviously the highest bidder would have won. If first party failed to complete the deal based on the terms then the next party could be offered the deal.

Lots of issues with this one but jacking the price / changing the terms on the first party w/o having had a chance to respond was not good form.

just my .02

I agree. Had this happen to me as a buyer. Agreed to terms via PM and email, waiting for contract (it was 4th of July weekend, so contract supposed to arrive Monday) and then seller came back Sunday with, I have a higher offer , will you match it. It was only a couple of hundred, but I refused as it made me distrust the seller. It's just not cool. If I had been sent the contract with a short return time frame, that would have been fine. I was brought up to believe that your word is your word.

Good examples of the principles I spoke of earlier, For a few measly dollars that you will lose track of very shortly, you have shown that your word is worthless.

 

[MOXJO7282]

For those that made disapproving comments I can understand the sentiment but I don't agree and as I think about it more I'm ok with my actions.

Business is business and even though we talked about agreeable terms he never said "I accept" in any way shape or form only that it sounds good and he would review the agreement to make sure it looks good. To be fair we were in agreement on the terms but he was cautious to say "I accept" because he wanted to see it in writing.

As I look at the timing I sent the agreement to him at 437pm yesterday and the unsolicited 2nd bid came in this morning at 9am. I immediately contacted the 1st buyer this morning at 1022am with the bad news but with an opportunity to match.

This happens all the time in business and it is not seen as either unethical or socially distasteful in my experience.

 

[letsgosteelers]

As I look at the timing I sent the agreement to him at 437pm yesterday and the unsolicited 2nd bid came in this morning at 9am. I immediately contacted the 1st buyer this morning at 1022am with the bad news but with an opportunity to match.

This happens all the time in business and it is not seen as either unethical or socially distasteful in my experience.

So just a few questions...

1. Did you talk to the first party to confirm he had received the agreement?

2. If he confirmed he recvd the agreement, had he had a chance to review?

3. If so, what was his response? Yes / No, need more time?

All assumptions here, but assuming there was no mention of a timeframe to respond, at the very least, the first party should have been given the chance to reply/accept to the *original terms/price*.

You said he was agreeable but wanted to see it in writing, with all due respect but, DUH!!

Who would accept an agreement w/o seeing the details in writing??. It sounds like you didn't even give him the chance based on your timeline. Then you proved he should have been cautious given your actions.


I'd say it was unethical and socially distasteful on all counts. Sorry, but that's just the way anyone who does business "on their word" would see this.

 

[MOXJO7282]

Good examples of the principles I spoke of earlier, For a few measly dollars that you will lose track of very shortly, you have shown that your word is worthless.

I hear this mostly from old-school guys and I wish the world was still such that you could agree on a "handshake'' because my word is as good as anybody's but that is not the way of the world anymore as people can no longer trust their fellow man.

If he had been able to trust me we would've had a concrete deal a week ago but he couldn't even though I gave him all my personal info and offer of references (even offered my participation on TUG as proof of ID)but he needed to see it in writing and as he reviewed another offer came in from someone I had been working with.

I always say in my ads the first to say "I accept" gets it and that is what happened here. I even took it a step further and offered to allow him to match so I believe I did do the right thing.

I can honestly say if he had ever said "I accept" or if we had a signed agreement I would've honored because I did think legally that constitutes a deal but that never happened and now from what others have said it really doesn't constitute a deal so he left open a window to lose the deal and he did.

I don't feel good about it because the 1st buyer was very nice but I am comfortable with my actions from an ethical standpoint despite how some feel.

 

[MOXJO7282]

So just a few questions...

1. Did you talk to the first party to confirm he had received the agreement?

2. If he confirmed he recvd the agreement, had he had a chance to review?

3. If so, what was his response? Yes / No, need more time?

All assumptions here, but assuming there was no mention of a timeframe to respond, at the very least, the first party should have been given the chance to reply/accept to the *original terms/price*.

You said he was agreeable but wanted to see it in writing, with all due respect but, DUH!!

Who would accept an agreement w/o seeing the details in writing??. It sounds like you didn't even give him the chance based on your timeline. Then you proved he should have been cautious given your actions.


I'd say it was unethical and socially distasteful on all counts. Sorry, but that's just the way anyone who does business "on their word" would see this.

I respect everyone's right to an opinion and I won't go on about this but will respond to you to say you must not be a modern day businessman or negotiator because nobody does business on their word anymore because there are too many devils in the details. What I wouldn't do and don't think I did was violate any ethical business practice.

He did see the terms in writing via email but just wouldn't accept them in that form. I also said at one point " As soon as you offically accept I take down the Redweek ad and stop accepting offers" I guess he didn't think someone else would come along. Nor did I but it happened.

What was I supposed to do at that point be a nice guy at the detriment of my family and say I told you this could happen and even though you ignored that statement I'll accept this over another substantially higher bid? That wouldn't be in my family's best interest.

 

[comicbookman]

I respect everyone's right to an opinion and I won't go on about this but will respond to you to say you must not be a modern day businessman or negotiator because nobody does business on their word anymore because there are too many devils in the details. What I wouldn't do and don't think I did was violate any ethical business practice.

He did see the terms in writing via email but just wouldn't accept them in that form. I also said at one point " As soon as you offically accept I take down the Redweek ad and stop accepting offers" I guess he didn't think someone else would come along. Nor did I but it happened.

What was I supposed to do at that point be a nice guy at the detriment of my family and say I told you this could happen and even though you ignored that statement I'll accept this over another substantially higher bid? That wouldn't be in my family's best interest.

Email is not binding. He was correct not to trust you, as you clearly state here your word is worthless "nobody does business on their word anymore". I am at a loss as to why you posted the Original question since it is clear you don' t feel obligated to honor your word. Saying he never said "I accept" is just rationalizing. From your statements, you had agreed on everything. Your buyer was following your philosophy in requesting the terms in writing, something stressed over and over here on TUG. What you did was legal, but very unethical. I have been a businessman and a lawyer ( technically I'm still a lawyer). I would advise anyone asking to not do business with you, as you have proved you are not to be trusted and are not bothered by that.