Sorry for the long post, but this is a rather complicated story. I think you might find it interesting.

I am a buyer. Negotiations with the seller have taken about 2 weeks of back-and-forths. But last Thursday, we verbally agreed on a price that was at and maybe even a little above fair market value.

Both my agent and the listing agent knew the property was originally overpriced. And after 3 months of no action, the seller finally knew they would have to face the facts. We knew they weren't happy about the price.

We paid for an inspection, and then removed all the subjects, signed the contract, handed over a certified check for the deposit, and was waiting for their signature. It was a done deal in my mind and according to my agent.

The morning after we signed the contract, there was a sudden "2nd showing" on the property, followed by the news that the new buyers want to make an offer.

The seller's agent told the new buyer's agent that there was already a verbally accepted offer.

Meanwhile, the seller is still dragging his heels on signing the contract.

The NEW buyer's agent then calls the seller's agent and DEMANDS that she present the new offer. In my own experience-my ex was a realtor-when a seller's agent tells a buyer's agent that there is an accepted offer-even just a verbal one-the response is usually both: A) Let me know if it falls apart and B) my buyer would like to make a back-up offer.

So next-in spite of their verbal agreement to us-the sellers take the new offer (which has apparently more than one subject in it, where ours had none).

I was given an hour to decide whether I wanted to match the new offer.

After some agonizing minutes, I decided not to make a new offer, and indeed to withdraw my old.

The property is still not showing as sold in the MLS. It's only been 5-days, so not sure this is unusual.

But I have been told many times that as long as there are subjects, a buyer can get out of an agreement fairly easily. So I wonder if there will actually be a sale.

Question #1: Was it ethical of the seller to back out of a verbal agreement? Was it legal?

Question #2 begins with a possible scenario:

What if the seller arranged to have a buddy pretend to be a buyer, and make an offer to drive up the price, knowing it would be possible for his buddy to easily get out of the offer? The plan was to scare us into upping our offer for a place we obviously wanted. The fact that we had already paid for an inspection was proof that we were on the hook and just needed to be reeled in.

So the new buyer FORCES his agent to present an offer because he secretly knows that the seller has not signed the contract.

Only the seller and the new buyer really know what is going on.

In this scenario, neither of the agents are culpable. The new buyer's agent is just following the client's demands. The seller's agent is just doing what she thinks she must.

I'm a psychologist, and I know human nature. I also have enough information about the seller to know that he is, shall we say, a high-stakes gambler in the truest sense of the word. I have a few other pieces of information about the seller to indicate there is at least some plausibility to my idea.

I know this could be totally off the mark. But I do think my what-if is possible.

And if the deal with the new buyer falls through, it would lend further credence.

So, if a link could be shown between the new buyer and the seller, something that points a little more certainly toward collusion, would what happened be fraud, and actionable, or is it little more than a prank?

Thanks for your time.

If the other offer is not real &/or legitimate, all that the seller & their agent accomplished was losing a real &/or legitimate buyer (you).

No legal advice given.

Ultimately, a verbal agreement is worth nothing.

I just want to make sure if I am following exactly how this all went. You decided to do an inspection on the property prior to getting an offer accepted? If so, why wouldn't you have written an offer conditional on a home inspection instead and then did your inspection after you had the offer accepted? Then, if everything went well, you could remove the condition and you would have no worries about another offer coming in.

Unfortunately for you, I do no think there is anything that you can do about it. If they did have a friend write an offer then that was a risk that they took which may have backfired on them. Have your agent watch to see if it goes conditional or sold and, if it does not, then submit an even lower offer!!

The inspection was done after the verbal agreement on the price (at the recommendation of our agent).

Aren't verbal agreements binding in many cases under the law?

Contracts with regards to a sale of real estate MUST be in writing to be valid.

Not un-common at all. In this Country, financed deals often take 6 to 10 weeks to actually "Close" and show a property as Sold. Even CASH transactions consume a few weeks.

I think you're reading way too much into the situation. Most Buyers become somewhat ego-centric and refuse to recognize that there are other Actors in the environment.

One item which may give you a basis for action in Canada could be the disposition of the Earnest Money Check that accompanied your Offer. You might review that to determine whether processing the Check can be interpreted by your legal system as the equivalent to accepting your Offer . . . . but that would be a "Stretch".

PS: Perhaps the answer to that question is already present in your post:

Did they promptly hand you back your Certified Deposit Check on the spot, when you withdrew your Offer ?

Thanks all for your advice. I will let you know how it all turns out.

Just FYI, up here it will stay active on MLS until such point that it is a firm deal (all conditions removed). At that point it is considered sold.....normal time for this is 5-10 days.

This is unfortunately a huge thing that I have experienced and it is extremely entrenched in the real estate world, in my mind, because people are always trying to push for the highest price and negotiate for it.

We had a similar situation with the exception where seller had property also over priced and price was negotiated over the course of 2 weeks. We finally agreed to the sellers price. Contract was signed by both buyer & seller this took place on Thursday on Tuesday morning we received a fax that the sellers lawyer disapproved the contract due to another offer coming in. We were then told we have til the following day to come up w/a final offer and they would select the high bidder.

We had our own agent and the sellers agent dragged his feet as to having our agent show the property. Once the offer was put in we had the excuse I will give it to the buyer tomorrow, then the excuse was he is out of town til Friday. This was a MSL listing.

I feel the sellers agent did not want to have to split the commission w/our agent. I understand there is buyers 3 day to recind. Thoughts as to if we have any recourse

Any update on the situation??? I don't think the verbal agreement really means anything...unfortunatly. You would think people would stick to their word, but if you want something to be for sure, always get it in writing! Good luck to you.