Real Estate Question

[Kullervo]

In the US, if someone places a bid on a house and has already given a down payment, is it legal for the seller to then accept a bid from another party and reject the first?

The reason I ask is because this is exactly what has happened to my family. We have had our eye on this house for a while and finally decided to get it. Our final bid had already gone through to the seller and we were all set to get the keys when this happened. It's been very upsetting.

Dubious seller ethics aside, is this illegal? Does this sort of thing vary from state to state?

[Gustav]

In the US, if someone places a bid on a house and has already given a down payment, is it legal for the seller to then accept a bid from another party and reject the first?

The reason I ask is because this is exactly what has happened to my family. We have had our eye on this house for a while and finally decided to get it. Our final bid had already gone through to the seller and we were all set to get the keys when this happened. It's been very upsetting.

Dubious seller ethics aside, is this illegal? Does this sort of thing vary from state to state?

did you have any hard evidence to prove that you've won the bid? like a written contract? was there anything of this sort?

[Keemun]

In the US, if someone places a bid on a house and has already given a down payment, is it legal for the seller to then accept a bid from another party and reject the first?

The reason I ask is because this is exactly what has happened to my family. We have had our eye on this house for a while and finally decided to get it. Our final bid had already gone through to the seller and we were all set to get the keys when this happened. It's been very upsetting.

Dubious seller ethics aside, is this illegal? Does this sort of thing vary from state to state?

Corey, the laws of real estate and contracts are different in each state and your family will need to speak with an attorney in your state to get the answer to your question.  Sorry, I know you are looking for a more concrete answer.   I hope everything works out for you and your family. 

[PerfectWagnerite]

In the US, if someone places a bid on a house and has already given a down payment, is it legal for the seller to then accept a bid from another party and reject the first?

The reason I ask is because this is exactly what has happened to my family. We have had our eye on this house for a while and finally decided to get it. Our final bid had already gone through to the seller and we were all set to get the keys when this happened. It's been very upsetting.

Dubious seller ethics aside, is this illegal? Does this sort of thing vary from state to state?

Did you or the seller sign anything? If not there is very little you can do. The thing is until the house is SOLD nothing is official. The seller can just refund your money and that is the end of that. Sorry to hear that...

[head-case]

In the US, if someone places a bid on a house and has already given a down payment, is it legal for the seller to then accept a bid from another party and reject the first?

The reason I ask is because this is exactly what has happened to my family. We have had our eye on this house for a while and finally decided to get it. Our final bid had already gone through to the seller and we were all set to get the keys when this happened. It's been very upsetting.

Dubious seller ethics aside, is this illegal? Does this sort of thing vary from state to state?

Your description doesn't seem right, how could you be ready to "get the keys" when you had only made a "down payment."  This can vary depending on local laws, but the general procedure is that you make a bid, accompanied by a substantial deposit, which is put in escrow.  Then the bid is formally accepted, after which the property is "under contract."  At that point if you fail to buy the seller keeps the deposit.  To get out of the contract you generally have to show that one of the terms of the contract has been violated, which is why there is often a house inspection to see if the condition of the properties is as described.  Then the final closing occurs, when the actual payment for the property is made (usually involving the mortgage company) and the property is transfered.   Whether the contract allows the seller to withdraw from the contract without penalty may vary, but I would think that any reasonable contract would exclude this.  Was the transaction handled through a reliable real-estate agent?

[Kullervo]

I'm really sure about the details. I'll have to ask my parents.

[Don]

Your description doesn't seem right, how could you be ready to "get the keys" when you had only made a "down payment."  This can vary depending on local laws, but the general procedure is that you make a bid, accompanied by a substantial deposit, which is put in escrow.  Then the bid is formally accepted, after which the property is "under contract."  At that point if you fail to buy the seller keeps the deposit.  To get out of the contract you generally have to show that one of the terms of the contract has been violated, which is why there is often a house inspection to see if the condition of the properties is as described.  Then the final closing occurs, when the actual payment for the property is made (usually involving the mortgage company) and the property is transfered.   Whether the contract allows the seller to withdraw from the contract without penalty may vary, but I would think that any reasonable contract would exclude this.  Was the transaction handled through a reliable real-estate agent?

Excellent description of the process.  The State the property resides in is very important as well as the terms of the contract.

[(poco) Sforzando]

You are evidently in Florida. Try this:
http://www.weblocator.com/attorney/fl/law/resreal.html#70

I quote the following:

Purchase Agreement
A purchase agreement is a written document submitted by the buyer to the seller detailing the buyer's terms for the purchase of real estate. The terms of the purchase agreement can be enormously complicated and cover a panoply of issues such as price, down payment (also known as earnest money), mortgage arrangement, what items will be left with the property, zoning restrictions, title, deed, taxes, remedies in the event of default, conditional requirements for purchase and other important details (such as a satisfactory inspection).

The seller may accept the buyer's purchase agreement, reject it or issue a counter-offer. Usually, a buyer will limit the period of time in which a seller can accept the purchase agreement. If that period passes without a seller's acceptance, the buyer is under no obligation to purchase the real estate. However, if the seller accepts the buyer's purchase agreement within the time allotted, the buyer is legally committed to buying the real estate under the terms of the agreement. Therefore, it is extremely important that the buyer understand the terms of the purchase agreement before signing it and submitting it to the seller. Any contingencies (e.g., need to obtain financing) should be provided for in the purchase agreement.

Perhaps the underlined passages are relevant. But your parents should check with a lawyer specializing in this area.