OFFER ACCEPTED?

Once upon a time, a buyer viewed a condo unit. He liked what he saw and quickly made a move to negotiate. After a few rounds of back and forth, he agreed to the seller’s asking price—Php50 million. To show his commitment, he prepared the earnest money check.

Strangely, the seller began stalling. He wouldn’t accept the check. Days turned into weeks, and still, the seller refused to receive the payment. Frustrated and suspicious, the buyer eventually backed out.

Months later, the buyer discovered the real reason for the delay: the seller had already accepted a previous offer for Php40 million. He had even received the earnest money for that deal—and was now trying to wriggle out of it. The seller attempted to return the Php40 million buyer’s check and added some amount as penalty, but the original buyer wouldn’t budge.

In the end, the first buyer stood firm, and the deal pushed through. Credit to the seller—he honored the initial agreement, even if it meant walking away from a Php10 million higher offer.

The Lesson?

I’ve seen contracts that penalize sellers for backing out of a deal—for example, requiring them to return the earnest money plus pay an additional amount to the buyer. The challenge with that clause is proving fault: Was it really the seller’s doing? Or did the deal collapse for another reason?

One practical solution is this: If you're the buyer, warn the seller that if they cancel the deal unreasonably, you’ll annotate the signed offer letter as a lien on the property. That kind of annotation can be a powerful deterrent—likely enough to scare off other prospective buyers.

And for this reason it might be a good idea to have the offer letter notarized.