Can my parents compete for a pending sale on a house and still put some kind of "hold" on another one?

Question

My parents' house burned down recently and they need another house very soon. They found a neighborhood with new construction and they fell in love with a house that has a pending sale on it. They are making an offer on the house and the original prospective buyers will be notified that they have a couple of days to make a final decision on the house or else it will go to my parents. However, there is another house in the neighborhood that they like almost as much. They will probably get that house if the first one falls through. Is there some way that they could prevent the sale of that house until they can make a full offer on it?

Answer 1

No, what you’ve proposed is impossible.  They can

-Make an offer on the pending house, and take a change that the sale falls through. (Not a good plan if moving fast is a priority). If it doesn’t fall through, then they can make an offer on the other home.

or

-They can make an offer on the other home and forget the first one.

It’s nothing short of foolish to put offers in on two houses at once. If both offers are accepted, you’re under contract to buy two homes. There’s no way to prevent the sale of a home because you “might” want it. That’s not fair to the seller.

Answer 2

Nope.

The new construction house was probably bought by someone who had a house to sell, and the builder is given them the "first right of refusal"...this is common with new construction contingencies.

If your parents put a bid on another home, and that is accepted by the sellers and before your parents can withdraw the new construction offer, the builder informs your parents they will accept...guess what?  Your parents are now legally obligated to buy TWO homes....so they can risk getting sued by the seller that they don't buy from.

If a seller pushes it, the earnest money is not only lost, you can be sued for specific performance, which can include losses that are in the thousands.

Your parent's Realtor would be very, very foolish to even participate.

They need to decide which house they want more....and pursue that house.

Answer 3

Their offer is only the "backup offer". If the seller has already accepted an offer and the sale is pending, the only way your parents could then have their offer accepted and buy the home is the hope that the buyer cannot come through with financing, etc. by closing. They will just have to wait and see. It may be radical, but they could attempt to make an offer on the second home, subject to approval of the offer on the first home. That may be a stretch, but I've seen stranger things happen lately.

Answer 4

Here's the deal:

When you put an offer on a property, you have the right to take that offer back before it's accepted. Just like a seller can put a house on the market and take it off before they accept any offer. Also, when you make an offer, you have to show evidence of a good-faith deposit with your real estate agency (usually like $2000 - if the offer is accepted, they use those funds to open escrow).

I had a similar situation a couple months ago, where I was looking for foreclosure condos in San Diego for an investment. I saw a place I liked that was a short sale (they hadn't started the short sale process yet, which takes months) and it already had a couple of offers on it. But, I wanted to be able to put an offer on another place if this one took the 4 months the selling agent thought it would to clear the short sale.

My agent researched this and said that we could put two offers out there. If one was accepted, we would just pull the offer on the other place. The worst case scenario would be that both offers were accepted simultaneously and we would be out the $2000 deposit (if the seller really decided to make a stink out of it).

This kind of dilemma happens all the time. There are processes place to deal with it. And, your parents' real estate agent will know how to handle the situation (or be able to find out).

Answer 5

they would have to put deposits on both houses and if both offers are accepted - they could be screwed - at the very least they would lose the deposit on whichever house they cancel

Answer 6

Put a "Right of First Refusal" on the second . . . any realtor can do this for you . . .

Answer 7

Aren't they using a real estate agent?  

If I was the seller of the other house, that would make me mad.  I should possibly pass up a chance to sell my house because they may buy it IF the house they really want goes to someone else.  I think they should just hope the timing works out for them.  

The pending part is probably a sale contingency.  The other people have a house to sell.  They need the proceeds of that sale to buy this house.  If that house isn't ready to close, the sellers can renege on that sale in favor of a new contract.

Answer 8

All depends on the way the offers are written. If contingent upon selling something else and your parents write a back up offer, sellers could ask first buyers to perform or withdraw.  Then your parents would or could be in line to buy it. But I would advise them to be careful, in writing more than one offer at a time, they could end up in a position of acceptance and asked to perform on 2 properties.