I have just accepted a conditional offer on my house. Can I still look at other offers?
When you decide to sell your home, you can look at as many offers as you want.
Even if you accept a conditional offer, you can look at others because the conditional offer is not final and binding on you and the buyer until all of the conditions in that first offer have been fulfilled or waived.
However, before you accept a conditional offer, you may want to consider giving yourself some flexibility to look at other offers and protecting yourself so that you don’t wind up selling your property to two different buyers at the same time.
One of the ways to do this is to include an “escape clause” in the first Agreement of Purchase and Sale. This clause requires you to notify the first buyer if you accept another offer and gives them a set period of time – 48 hours, for example – to waive or fulfill the conditions on their own offer, or to walk away from the purchase.
If you decide to include an escape clause in the first agreement, you should make sure that the second agreement has a condition so that if the first agreement becomes firm and binding, the second agreement is terminated. This may affect the second buyer’s decision to continue to make an offer, but you can discuss the pros and cons of this approach with your registered real estate representative.
You should also work with your sales representative or real estate lawyer to make sure the wording of such “escape” clauses is precise and takes into account all potential issues that may arise.
If the first buyer waives or fulfills their conditions within the deadlines stated in the offer, you must sell your home to that first buyer under the original terms of the offer. If the first buyer doesn’t waive or fulfill their conditions, and this is confirmed in writing, then the first deal becomes null and void and you can go through with the sale to the second buyer.
There are risks with entertaining more than one offer. If you aren’t careful about including the proper terms and conditions in each agreement, you could end up selling your home to two people at the same time.
That could be the outcome if you continued to market your home after accepting a conditional offer but you didn’t include a clause in the second sales agreement making that agreement conditional on your being able to get out of the first agreement.
Should you find yourself in that situation, seek legal advice immediately. Better still, take steps up front to reduce the risk of it happening.
To sum up, if you choose to look at other offers after having accepted a conditional offer, it is very important that you protect yourself by ensuring that the appropriate clauses are put in each agreement that you contemplate accepting.
As always, these are simply general thoughts about what could happen. These situations can be tricky – and potentially very costly – so you should always seek advice from your real estate professional or lawyer about your specific situation before you accept any offer.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.