Legal Question in Real Estate Law in California

I don't know of any state in which you can create a binding contract that you can sue on for specific performance if the seller declines your offer, even if it is over the asking price. A seller who gets a seemingly too eager offer at his asking price is always free to conclude he asked to little and decline the sale. I can't think of any state where that is not true. Likewise, an agent does not immediately get the right to his commission when an offer comes in. They have to ride with the seller and see what happens. Now if the seller makes a big mistake and never finds another buyer, or gets greedy and winds up having to later accept a lower offer, the agent has a case for the commission at the asking price offered. As long as a sale goes through in the ball park of the asking price, however, most agents will not risk the bad PR of suing a client over, for example, the difference of $1,275 in the seller's agent's share of the commission between a $450,000 rejected offer and a $399,000 subsequent sale. Whether the property is REO or not makes no difference in any of this.

Remember the days when sellers were getting multiple offers as soon as the property hit the market? The lucky winner would invariably end up paying more than the asking price. Now, as then, the seller can take his chances that a higher offer will come in soon. It seems very risky today, but the seller is under no compunction to accept a full-price offer. There is no contract without offer and acceptance, and the listing and advertising of the property is not an offer to sell, it is a solicitation of offers to buy.

The seller is not bound by your offer until he accepts it. That is the fundamental rule of contract law.