No, a seller can't cancel a contract on the basis of a subsequent cash offer unless the contingency was not fulfilled. eg contingent on the sale of buyers house by x date and sale didn't close. Or a financing contingency or other contingency not met. This is why backup contracts exist. There are enough primary contracts that fail to close that a backup makes sense. What would be the point of a contract if the seller could simply change his mind and jump into another contract without following the terms already agreed to by the parties? Some contingent contracts have very tight dates that allow the seller to cancel (think 72 hour kick out clause here). These type of primary contracts are especially good for backup contracts but you still have to follow the terms. Those agents that don't present backup offers to their sellers are thankfully few and far between IME. I agree with getting the sellers response to the offer in writing to prevent that scenario.

bec - they wanted $10K in light fixtures allowance? WOW! Sounds like you had a bad realtor. The 2nd offer could have easily been countered rather than flat out rejected. Response: Yes, it was countered and we couldn't reach an agreement. She wanted 50K under the asking or 40K + 10K in a lighting allowance. I think we countered with 25K (meeting her half-way) under asking and she wouldn't budge. Hope the price drop works for you. Before you drop the price, counter back to this offer without the selling contingency to see what happens. If they don't accept, then reduce your price. You may want to reduce your price in the counter, remove the selling contingency and make it firm and final. Don't flat out reject this one - try to make it work. Response: Yes--we countered with 20K off the asking price, no-contingencies, 2 month close, which should give them time to sell their property. Agent has been instructed to lower the price on Friday if the counter is not accepted. Where I am, the earnest money check accompanies the offer to purchase and is deposited into an escrow account upon acceptance of the contract by all parties, if that is not the case where you are (i.e. NY etc.), you do have a problem. Response: Same where we live. We attribute the oversight to the buyer/seller agent. Somehow, he didn't put down escrow money even though it was in the contract and the agent wasn't able to contact him during the 2 week contingency period. At the end of the 2 weeks when the contingency period ended and he still hadn't put down escrow money and wasn't returning calls from the buyer/seller agent, we knew the offer wasn't going to go through. We blame our agent for allowing this situation to occur. Earnest money should be refundable, if through no fault of the buyer the buyer canÂt purchase the house, or, it becomes non-refundable after an acceptable appraisal, inspection, removal of financing contingency etc. Response: Yes, I agree. We have bought and sold several properties and homes so I am familiar with how escrow money works. We've always put down escrow money at the signing of the contract and had a refundable period. It becomes non-refundable after a certain time period when all the inspections, etc. are done. We weren't about to get burned twice by the same buyer, though, which is why we requested that the escrow money be non-refundable. He previously took the house off the market for 2 weeks only to disappear and not go through with the purchase. I think we were entirely reasonable in our request for non-refundable ernest money.

We went over our situation with the listing agent again: We said we have to get our own house ready for sale (we told her we'd need about a month), and asked if the owners would consider a contingency offer. She said a few years ago no one would have, but she said given the market today, yes, the sellers might be open to a contingency offer. I also asked her if she was free to tell me how long were they planning to keep it on, and she said they did not want to show through the holidays. This house listed in early August, so I'm guessing they may have signed a three-month contract. The agent also said we could think about "keeping in touch." Good for you! You knew what questions you wanted to ask and did; plus you got honest answers! It sounds like a good situation for both of you. I don't agree that you need to bid high. You also need to have your own agent as I don't know if the sellers agent can help you come to a number. You of course would want lower comps to get a better price while the seller will want higher comps, if either can be found. "I just don't understand why people go shopping for a new home when their home hasn't sold, let alone is not even remotely ready to put on the market. In a sellers market, maybe, but not in these market conditions." Raising hand... No secret that I've been out there looking since February. I looked online until late April / early May then stopped going out when the market stopped. I was still looking online though and did not see anything worth going out for until late July. Hubby & decided after the last outing that for the price we were shopping we should have found something in the chosen area(s) but it wasn't meant to be. We decided to look at new and after pounding the pavement found "the one", now we have to sell. I'm actually surprised you aren't looking in your new area. Do you have any clue what's out there? I doubt you want to rent, hopefully you won't have to. Everyone has their own reason for looking before putting their house for sale or looking before selling. I can say there is a lot of inventory in very inflated markets here. If any house will do, then you don't need to cover your bases, but if you have special needs like we did, it gets harder to find. My house is for sale right now and there is no way on this earth I would accept a contingency to take my house off the market to give you time to sell yours. In most states, the house with the contingency on it must be listed as under contract (don't know the exact term), which would significantly reduce showings for the seller even with a kick out clause. In this tough market, we're just not willing to take that chance, especially since your house is not ready to list. Not sure what the norm is here or what we would do. I know I would not take it off of the market but may consider it if I can still show the house and there was some kind of kick out clause where they would either remove the contingency...

I agree w Kris_MA & lucy ... in a sellers market, if you don't have your house on the market yet, I don't think you'll even have an offer considered. And $2K in earnest money isn't anything, 2%-3% is the norm where I am (avg home price $500K). IMO, you'll need your home under contract with at least the inspection contingency removed by your buyer. I agree, put your house on the market and make the buyer agree to a 60-90 day rent back. Salti - Seller contingency for a replacement home is not uncommon in these parts, at least in a sellers market. Mine had a 17 day contingency with the option to extend for 14 more. Multiple offers on my home, never was an issue with any of my potential buyers.