Whether the listing agent continues to market a property and/or hold an open house after it goes under agreement is really a matter of personal preference and discussion between the seller and agent.
QUESTION: Is there a rule about having an open house after a Purchase & Sale Agreement has been signed?
ANSWER: Whether the listing agent continues to market a property and/or hold an open house after it goes under agreement is really a matter of personal preference and discussion between the seller and agent.
Keep in mind that not all scheduled real estate closings actually take place. The seller, of course, is obligated to perform and go forward with the transaction under the agreement, as is the buyer. But there is any number of reasons as to why a buyer may be unable to close. For this reason, the seller may decide to accept backup offers.
If there is nothing in the agreement to preclude accepting backup offers, the seller and broker may decide to continue to market the property and even hold an open house.
There is nothing illegal about backup offers per se, although there is a lot of confusion about what constitutes a backup offer. Is it an indication of willingness on the part of the backup buyer to submit a written offer in the future or is it an actual written offer?
To avoid any confusion, all parties should be absolutely clear what their rights and obligations are under a backup offer - i.e. the buyer should be clear that the deposit is simply a backup in the event the current agreement fails. The seller should be clear that he is legally bound to honor the current agreement and cannot accept the backup offer even if it is higher unless the current agreement fails. The agent should be aware that he/she can only deposit a check if there is an executed agreement between the seller and buyer unless the parties have indicated to the contrary that the check should be deposited.
If the seller has a signed agreement but decides to accept backup offers, there is nothing improper or unethical about having an open house. It's really a question of what the seller is comfortable with.
Holding the open house in no way diminishes the seller’s contractual obligations under the current agreement, but it might be a good opportunity to gather a pool of interested candidates should the current agreement fall through.
If the seller does go ahead with the open house, however, potential buyers should be made aware that the house is under agreement.
Linda Goodspeed is a longtime real estate writer and author of “In and out of Darkness.” Email her at: firstname.lastname@example.org.