Buying a new house can be a stressful process, especially when you find your dream place. You never know if someone outbid your offer. Can this happen even after signing the contract? Can seller accept another offer during attorney review?
The short answer is yes. During the attorney review, the seller can legally accept new offers without having to notify the buyer. However, in states that don’t mandate an attorney review period, the property goes off the market immediately after forming the contracts.
Below, you can find everything you need to know about how selling properties and attorney reviews work.
The Purchase Process: How Does It Go?
Whether you offer your house for sale or think about purchasing a new home, you should understand how things work. Normally, this process doesn’t happen overnight. It usually takes over a month to finalize the sale.
When selling or buying a house, you go through three main phases, which are:
1. Submitting an Offer
As a buyer, once you’re ready to submit an offer, you should prepare all the required papers. These documents should be sent to the listing agent, along with the offer itself. From there, the listing agent contacts the seller to accept, make a counter-offer, or review other offers.
2. Sending Out Contracts for Attorney Review
At this point, all parties should have already signed the contract. Then, the contract is emailed to the seller, the listing agent, the seller’s attorney, the buyer, the buyer’s agent, and the buyer’s attorney all at once.
As soon as this happens, the attorney review period begins. The attorneys should exchange a review letter (rider) with details about the purchase until they get to a middle ground. Once the rider is signed by all parties, the attorney review period ends.
3. Becoming Under Contract
Now is the time for a home inspection. Usually, the seller isn’t present during this stage. If a major problem surfaces, the buyer has the right to cancel the purchase, move forward with it, or make requests.
Similarly, when the buyer makes requests, the seller has the right to cancel the deal, agree, or renegotiate. With everything settled, the buying process goes as planned, and the deal is closed.
Can a Seller Accept Another Offer During Attorney Review?
Yes, a seller can still accept other offers while the main one is under attorney review. Consequently, the listing agent has to present all incoming offers to the seller during that time. Once the property goes “under Contract,” the seller can’t accept any more offers.
It’s usually a three-day process. During this, the seller has absolute freedom to cancel the deal or switch to a more profitable one with no consequences. Likewise, the buyer can also cancel the deal while still under attorney review.
Moreover, the buyer can increase the offer submitted during the attorney review period. That said, the seller doesn’t have to inform the buyer to make a counter-offer in case of receiving a higher bid.
Can a Seller Accept Backup Offers While Under Contract?
A backup offer is the only type of offer a seller can accept while under contract. Should anything happen, and the original contract gets canceled, the backup offer becomes next in line.
Not only is it a great plan B, but it also gives the seller leverage in case the buyer sends any requests. That’s especially when the backup offer is significantly higher than the original one. That’s why it helps to inform the buyer’s agent about receiving such an offer.
Is It Worth It for a Buyer To Make a Backup Offer?
If you find your dream home as a buyer and it happens to be under contract, it never hurts to take a look at it. While it can be a long shot, you don’t have to give up on it completely. Your agent can even inquire about the contract’s progress.
In case the contract gets canceled, a seller prefers to negotiate with someone who has already seen the house. It’s much less of a hassle than going back on the market and repeating the process all over again.
FAQ
A Final Thought
The whole process of putting a house on the market and attending showings is tiring to both the buyer and the seller. It’s a long journey that has to end with both parties in agreement.
Sometimes getting a higher house purchase offer can make the seller regret accepting the original one. So, is there a way out of it? Can seller accept another offer during attorney review?
Fortunately, a seller can always accept other offers as long as the contracts are still under attorney review. Moreover, a seller can cancel the original contract and back out of the deal if offered a better one.
However, once the house goes under contract, accepting another offer doesn’t count anymore. That’s why a seller must be 100% sure about a deal before making the decision and accepting it.
