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  1. #1
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    Question Does First to Sign Contract Win

    I have an accepted offer on a condo in NYC. However, there was a previous accepted offer which is taking a while to get the contract signed because they are nitpicking (this is according to the broker). So now it seems I'm in a race to sign a contract before them. Assuming the other offer actually exists, can the seller choose me over the other offer even if they sign before me? Or must the seller go with whoever signs first? According to the broker, we are the more attractive offer. I really appreciate any input on this. Thanks everyone.

  2. #2
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    Default Re: Does First to Sign Contract Win

    Quote Quoting IronMaiden
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    I have an accepted offer on a condo in NYC. However, there was a previous accepted offer which is taking a while to get the contract signed because they are nitpicking (this is according to the broker). So now it seems I'm in a race to sign a contract before them. Assuming the other offer actually exists, can the seller choose me over the other offer even if they sign before me? Or must the seller go with whoever signs first? According to the broker, we are the more attractive offer. I really appreciate any input on this. Thanks everyone.

    I had this situation myself in NYC.

    According to my attorney, the seller can send out, and have two or more contracts signed by different buyers and it's an issue of who the seller wants to finally deal with. I was told one seller I was dealing with was in the process of setting up more than one contract, and there's no law that says one contract is more valid than the other one.

    I was told the seller does not have to deal with the one who signed first. The one who signed first, however, may disagree and choose to sue.

    However, if you happen to get a "signed contract", you acccepted it, and then you file this contract as a "vendee lien", and you file it first, then yours if the valid contract. Who signed it first is not at issue here, it's the one who filed first.

    On the other hand, if only an unsigned contract was sent to you, not signed by the seller, and he did this with other sellers, and all of the contracts was sent back to him, he can choose to deal with any one of the buyers who signed, regardless of who signed first. In this case, the contract is more like a written offer.

    My attorney says he's seen sellers play games like this. The seller gets two or more accepted contracts ( offers ) back, then tells each of the other buyers that he got a higher offer, and then try to get the others to up the offering price, outbdding each other. So, the issue here is whether you want to get yourself into a bidding game, as the date signed by the buyers does not count. In this case, the more anxious the buyers are, the better for the seller.

  3. #3
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    Default Re: Does First to Sign Contract Win

    I have to disagree with schinfchin


    A contract is not valid if both parties cannot enter into the contract. If a seller has accepted an offer, they cannot accept another contract since they do not have the right to sell the same property twice, which is what they would be doing.



    With contracts, it is whomever has a fully accepted contract first, without reservations for acceptance of some other contract, that would have the rights of the contract.


    If you have made no alterations to the proposed contract and accepted it fully, then you have a binding contract. It does not have to be acknowledged by the seller for it to be binding. It is effective from the moment you sign it in acceptance.

    If you have made any alterations what-so-ever, the seller then must review and either accept or reject those changes before you have an enforceable contract.

    If there are two pending contracts that require review and acceptance, then the seller can do whatever he wants since he is not bound by any contract until he accepts one.
    I have an accepted offer on a condo in NYC. However, there was a previous accepted offer which is taking a while to get the contract signed
    If they do not have a signed contract and you do, you are the "winner". If their contract is not signed, their contract was not accepted. Verbal doesn't work with real estate.

    The seller can no longer take a first position contract. They can enter into contingent contracts all day long but those contracts cannot replace the first position contract until the first contract is voided for some reason.

  4. #4
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    Default Re: Does First to Sign Contract Win

    I agree with jk and just wanted to add one thought. In real estate often there are contingencies that need to be resolved before the contract becomes binding. There are many people who have learned how to "game" the contingencies to keep their options open even when the other party feels that they have a "done deal".

    "nitpicking" implies to me that the other buyer may be trying to play with contingencies in their contract to squeeze a little more out of the seller (thinking they have a done deal and the upper hand) which will make it unattractive to the seller to deal with them. Assuming that purchasing this property under the terms you've offered is your primary goal, being easier to deal with can help that happen.

  5. #5
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    Default Re: Does First to Sign Contract Win

    Quote Quoting jk
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    I have to disagree with schinfchin


    A contract is not valid if both parties cannot enter into the contract. If a seller has accepted an offer, they cannot accept another contract since they do not have the right to sell the same property twice, which is what they would be doing.
    Contracts I've seen in NYC calls for the payment of a deposit into escrow, and unless the funds are paid and deposited into escrow, the contract is not accepted by the seller.

    I've ran into this more than once with buyers, and was told that sellers plan to use my contract to get others to sign contracts with higher offers. I'm further told that if I plan to sue, and unless there is escrow money and already deposited, I would not have a strong case.

    My attorney further advised me that he handled cases where the buyer who got to signed first sue, the buyer simply announced he changed his mind and took the house off the market. At this point the buyer had incurred no expenses, no inspection, no mortgage application fees etc., and thus cannot sue for damages, and further cannot compell the seller to sell a house he no longer wants to sell.

    I once had a signed contract to buy a home, but instead of paying a deposit, got permission to do some small repairs before closing. The mortgage company took longer to approve the mortgage, my closing deadline is fast approaching. One day, I was at the place doing my repairs, and the seller showed up with a buyer. I said to him, "what's going on"?? He told me to call my lawyer if I had a problem.

    So I called my lawyer up and asked "can he sell the home twice"?? His answer was "he can refuse go forward with you, you can sue, and get a few dollars back for your repairs and expenses. BUT yes, he can sell it to someone else, even with a signed contract with you. BUT you can stop him in his tracks if your file a "vendee lien"!!

    That's what I did.

    What's the bottom line?? There NO jail time for people selling homes twice, and suing for actual expenses is a total waste. But a "vendee lien" stopped him immediately in his tracks, and when his lawyer was notified, he didn't bother me anymore.

    However, I'm told even vendee liens are not totally fool proof, but that's a totally different discussion. None the less, if my attorney is confident that legally, a person cannot legally sell a home twice, my contract is ironclad, there is no need for him to file the "vendee lien". His opinion was he would not be selling it twice if he refused to close with me.

    Often, though, when this happens, I get an unsigned contract, and if I sign, it's simply an offer.

    One final thought. I once was of the same opinion as JK and Scott67, maybe theoritically correct, but my actual "school of hard knocks" experience proved otherwise, that signing a contract first, while legally interesting, or even having one, can be meaningless.

  6. #6
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    Default Re: Does First to Sign Contract Win

    E=SChinFChin;347716]Contracts I've seen in NYC calls for the payment of a deposit into escrow, and unless the funds are paid and deposited into escrow, the contract is not accepted by the seller.
    well, then that contract would not be fully accepted until such action has taken place and as such, the contract would not be binding, just like I said.



    I've ran into this more than once with buyers, and was told that sellers plan to use my contract to get others to sign contracts with higher offers. I'm further told that if I plan to sue, and unless there is escrow money and already deposited, I would not have a strong case
    if that is part of the contract, then, of course, that action would have to be fulfilled for it to be a completed contract.

    My attorney further advised me that he handled cases where the buyer who got to signed first sue, the buyer simply announced he changed his mind and took the house off the market
    .Sorry. Doesn't work if the buyer is willing to force the issue. If there is a fully ratified contract, the buyer can sue for performance and the courts can force the seller to sell. It would be a suit to force performance.


    and further cannot compell the seller to sell a house he no longer wants to sell.
    wrong. Anybody can demand a court force a contractee to abide by the contract they entered into, even if it means forcing the seller to complete the transaction.

    I once had a signed contract to buy a home, but instead of paying a deposit, got permission to do some small repairs before closing. The mortgage company took longer to approve the mortgage, my closing deadline is fast approaching. One day, I was at the place doing my repairs, and the seller showed up with a buyer. I said to him, "what's going on"?? He told me to call my lawyer if I had a problem.
    that would require more explanation before I could comment one way or the other but it sounds like it was a self extinguishing contract that once a specified date had passed, unless extended, the contract was voided.



    What's the bottom line?? There NO jail time for people selling homes twice,
    well, I wouldn't go that far. Depending on exactly what happened, fraud comes to mind which can be a criminal charge under certain circumstances.

    . But a "vendee lien" stopped him immediately in his tracks, and when his lawyer was notified, he didn't bother me anymore.
    from what I have read, that does not force performance. It is merely a claim to money expended in the attempted purchase of the property.

    Sec. 667. Vendee's lien

    The vendee under a contract for the sale of land has, in equity, before he receives a conveyance of the land, a lien thereon for any payments which he has made upon the purchase price in case the contract fails of consummation owing to the fault of the vendor.33 This lien appears to be recognized by equity merely for the purpose. of aiding the vendee in the assertion of his quasi contractual right to a return of the purchase money upon a rescission of the contract of sale for the fault of the vendor.34
    His opinion was he would not be selling it twice if he refused to close with me.
    I was meaning that his mere contracting with multiple parties for the same property would essentially be selling the property twice. It cannot actually happen since once he sold the property, he no longer had title to convey.

    Often, though, when this happens, I get an unsigned contract, and if I sign, it's simply an offer.
    that would depend where in the process you are.

    One final thought. I once was of the same opinion as JK and Scott67, maybe theoritically correct, but my actual "school of hard knocks" experience proved otherwise, that signing a contract first, while legally interesting, or even having one, can be meaningless.
    No, it is not meaningless but do not mistake my point to mean that the OP signing a contract first, in itself, would result in a fully accepted contract. There is much more to the picture and without that additional information, a signature is just a signature.

    there are some very basic rules to contracts (as well as a lot of not so basic rules). The first part of contract law requires offer and acceptance. An offer is not, in itself, a contract. Once the offer is accepted, there is a contract as long as all actions dictated by the contract to cause it to be a fully ratified contract are fulfilled and it is very enforceable in the courts, if a person is willing to expend the time, money, and effort to demand enforcement.

  7. #7
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    Default Re: Does First to Sign Contract Win

    I look at myself as a Real estate investor. I don't go into deals and then go and engage in lawsuits to force performance.

    As to the contracts themselves, the sellers do not deposit mutliple deposits, and the buyers not selected would simply have their deposit checks returned.

    There's quite a number of instances where I'm told that there will be other buyer contracts involved, urged to be the first one to sign, and I declined to go forward. My position is I'm either the buyer or I'm not the buyer.

    I have to say this is not the norm, but here in NY, it's a good idea to have an attorney to be in on the deal. My attorney apparently does not feel that it's worth the trouble of suing for performance. I don't either.

    However, as I mentioned, my attorney did advise me if I receive a signed contract, to file a "vendee lien", that would put on record that this is the "one and only contract", and it would be impossible for other buyers even with contracts signed first to get clear title. His logic is most buyer's attorneys would counsel "sue for performance", and not think of doing this. If this is so, even if someone else sues for performance, because he signed first, would still find a problem getting clear title later.

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