When a seller accepts another offer is accepted, this does not necessarily mean the game is over for you. The seller may have deemed someone else’s offer is superior. For instance, they might have accepted a higher price or the promise of a cash deal and quick closing date. In New York City, an accepted offer is not binding. This means you are in a position to obtain the property you desire should the deal fall through. In such a scenario, make sure your backup offer is registered with the seller’s agent.
Wait until the ink is dry.Wait until the ink is dry.
In New York, the home buying process is different from certain other states, where the seller’s acceptance of a formal offer creates a contract. In this case, neither the seller nor buyer is prevented from walking away without penalty once the offer is accepted. Instead, it moves on to the next phase, where both attorneys conduct due diligence and review the contract, including the contingency clauses. It is binding only to both parties once it passes the due diligence stage, signed by both the buyer and seller, and is considered “in a contract.”
It means, if either party backs out before an inked contract, you are next in line.
Why parties back outWhy parties back out
It would help if you had your buyer’s agent try to determine why the deal fell through. The buyer or seller might have had a good reason that would not give you pause to go ahead. Typically, buyer’s agents do a good job screening their clients. However, perhaps the buyer did not provide their financials promptly and there, was a concern that they could not pass muster with the board. Other reasons might include a buyer’s failure to get financing or getting overwhelmed by the process. The latter might occur if a first-time homebuyer or a friend/relative advised that the deal does not make financial sense.
You should know if there was something else going on, though. For instance, if the seller was making unreasonable demands, you will inherit the same issue.
You are not obligated.You are not obligated.
Just because you are the backup offer does not mean you have to sit on your hands, hoping the accepted offer falls through. You are not legally bound by it, meaning you are free to look at other properties. If the initial offer falls through, you are not obligated to step up and purchase the unit. Should you find another property you like at least as much. You can walk away from the other place.
You are free to change your mind for any reason. Perhaps you have had a change of heart; financial circumstances have changed, or you may have found a different co-op or condo. On the other hand, you may have no reason at all. In any case, there is no financial penalty for you should you decide not to go through with the purchase.
No harm, no foulNo harm, no foul
While it may seem you are a seller’s second choice, there is no harm in putting in a backup offer. Someone could jump ahead of you, meaning you may not stand second in line. Although this seems to favor the seller, you retain your right to rescind your offer and walk away at any time.