A buyer presents a full list price offer which the seller rejects and counters $10,000 higher.
This typically isn’t a situation one need worry about, especially in a balanced market. However, sellers have the upper hand today with 1 in 5 Calgarians having to pay list price or higher to purchase their home.
But can a seller reject a full list price offer, even if there are no competing bids?
Lou Pesta, a real estate lawyer at Walsh LLP states: “Yes, the seller can reject even a full price unconditional offer. The seller brokerage agreement has a provision, however…”
This provision in the listing contract is where sellers need to be especially careful.
Section 7 of AREA’s standard Residential Seller Brokerage Agreement deals with remuneration (commissions).
Specifically of note is 7.1(c) which states that the seller will pay the brokerage “if, during the term of this Agreement, an unconditional offer to purchase the Property upon the terms specified in this Agreement is presented to the Seller which the Seller refuses to accept.”
Yes, the seller may have to pay commissions even if they don’t sell their home!
So sellers, before you go rejecting a full list price offer, have a word with your real estate lawyer to be certain that you won’t be liable for any commissions.