A buyer makes an offer on a Fairfax County home contingent upon the sale of her current home within 30 days. The seller accepts the offer in writing. Three days later, a second buyer submits a higher, non-contingent offer. The seller wishes to accept the second offer. Under Virginia law, what is the seller's most appropriate course of action?
Correct Answer
B) The seller must notify the first buyer and give her a specified time to remove the contingency or release the contract before accepting the second offer
Once a seller has entered into a binding written contract with the first buyer — even a contingent one — the seller cannot simply abandon it to accept another offer. The proper approach is for the seller to issue a notice to the first buyer (often called a 'kick-out' or 'bump' clause notice if such a clause was included) giving the buyer a defined period — typically 24 to 72 hours as specified in the contract — to remove the contingency or agree to release the contract. Only after the first contract is properly released or the contingency removed can the seller proceed with a second offer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
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