The question is very valid. The answer evolves before an Agreement of Sale or even a showing takes place. Paragraph 13 of the Pennsylvania Association of Realtors Listing Contract states the following “ONCE SELLER ENTERS INTO AN AGREEMENT OF SALE, BROKER IS NOT REQUIRED TO PRESENT OTHER OFFERS.” This is something that every Berks County home seller should be aware of when signing a Listing Contract. It is a point that is often overlooked but should be discussed more thoroughly with the Broker/Agent. There is a Property status known as Active-O, (O=Other). This status can be applied when after receipt and acceptance of an Agreement of Sale:
- Seller has instructed the listing broker to continue to market the property and make it available for showings, AND
- Seller is accepting offers, AND
- Agreement of sale does not currently contain a provision granting the seller the right to terminate or initiate the termination of the agreement of sale, AND
- Listing Broker and Agent is confirming to other TREND Participants and Subscribers that the Seller is aware and has affirmed the willingness to assume the risks and consequences associated with terminating the agreement of sale to accept other offers.
In areas of the country where the home selling market is more robust there is more competition for homes. This has enticed Brokers & Agents to continue showing homes that have Agreements of Sale with buyers who have conditions (contingencies) that allow the buyer to void the Agreement at their discretion. In almost all cases, the buyer can void the Agreement with no loss of deposit. The looser ends up being the seller who took their home off the market for a period of time and lost other opportunities to sell the home. Eventually, the Berks County home market will start to improve. This will likely mean there will be more sellers leaning towards taking Agreements but not giving up their right to entertain other interest during the buyer’s contingency process. We may see more homes listed as Active-O when this takes place. Buyers need not worry. The seller, by signing the Agreement, has agreed not to encumber the title. Selling the home to another party would be encumbering to the title and enforceable by the rule of law. Just make sure to watch the performance dates on those contingencies. This is especially true for the paragraph 8 of the Agreement of Sale. Watch out for Paragraph 8, (E), 3. b. If the seller has a back-up offer that is tempting, this may be the door out of the Agreement. You would still get your deposit returned but could lose the right to purchase the Property. Our real estate market has changed dramatically over the past several years. It only makes sense that a home seller has the right to pursue all opportunities to not just sell their Property but get it SOLD. The Active-O status is a playing field leveler for the home seller. It keeps everyone honest and motivated to competently and fairly complete the deal they set out to accomplish. I still subscribe to the edict that it takes a willing buyer and seller to make a great real estate transaction. Having a real estate agent that understands the market and conditions of acquisition is icing on the cake.
Jeffrey C. Hogue