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Can a house seller accept another offer after a bid has been accepted?

David J Alexander

Can vendors refuse an existing accepted offer in favour of a better one? Our expert David Alexander looks at a sticky situation.

Areader of this column has been in touch with an important issue about house buying in Scotland and whether vendors can refuse an existing accepted offer in favour of a better one.

They explained that a member of their family had a bid on a house purchase accepted through their lawyer. They proceeded with the mortgage application and recommended surveys.

However, a few days later they were told that the underbidder had contacted the seller directly and offered to slightly increase the offer they had made and asked that the property be taken off the market, to which the sellers agreed. The reader questions whether this is legal.

There is an assumption that under Scottish law once an offer has been made then nothing can be changed. But of course, both the purchaser and the seller have a right to reject a bid if the circumstances change. The purchaser in this case had still to secure a mortgage so would have had to walk away from the bid if this had not been forthcoming.

However, the general principle does stand that if an offer is made and accepted by the respective legal teams then that should be upheld unless there are mitigating factors involved. Wanting a few thousand pounds more would not count as a mitigating factor.

If this situation occurred most agents and lawyers would go back to their client and say that they would not represent them if they wished to reject the original bid in favour of a slightly higher one if the first offer had already been verbally accepted. Approaching a vendor directly should not supersede the relationship and contract the lawyer or agent has with the seller.

The Scottish system is designed to avoid the gazumping of the English system so that people cannot keep on upping their offers. Once the closing date has passed, then, the best offer is accepted or, in what appears to be the situation in this case, prior to a closing date being announced then an accepted offer should end the marketing of a property.

It is important to remember that the best offer is not necessarily the highest. Cash bidders and those not in a chain are always more highly valued than those who have yet to sell their home.

Anything can happen in the latter case, while a cash purchaser provides a deal that is unlikely to fall through and may be worth accepting even if it means losing a few thousand pounds simply to guarantee the sale.

Rejecting an existing bid is a complex issue and there could be certain circumstances where this situation may occur, but it is extremely unusual and goes against the moral obligation that agents and lawyers follow in conducting property sales in Scotland.

Only if there was a material difference in an element of the sale might this situation occur, and without further details it is impossible for me to determine why this might have occurred.

As a general rule I would say that once a sale is agreed by both legal parties then that deal should be adhered to without further negotiation. In this way the rights of buyers and sellers are protected to the benefit of both.

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