Legal Question in Real Estate Law in Maryland

For Sale By Owner, Round-Robin Auction Format

I'm planning on selling my home in Balto.City, MD via the "5-Day Method". An ad in the newspaper on Wed. will state a price that is about 10% below market, and the words "or best reasonable offer" and the ad will say "home will be sold Sun. Nite to HIGHEST BIDDER". Sun. nite there will be a round-robin auction until there is only one High bidder left. (check www.5-day.com ). My question is this:

1. If the highest bid is unacceptable to me, may I cancel the sale? Or, am I legally required to follow through?

Explanation sheets, and "terms" will state that I can cancel the sale at any time and for any reason. At this point in the sale, no contract has been signed.

2. If I find the highest bid acceptable, and we sign a contract (a standard "residential contract of sale"), do I need representation? Or will the title company handle things for both buyer and seller?

3. The price range of my house will be such that I will probably get a "first-time" buyer who will probably go FHA, which will require an inspection, and possible repairs. How do I state in the contract that if costly repairs are required the contract/selling price may need to be renegotiated?


Asked on 11/11/99, 5:57 pm

1 Answer from Attorneys
Robert Sher Wagshal and Sher

Re: For Sale By Owner, Round-Robin Auction Format

In your offer documents, you must make it clear that you have the right to reject any bid you deem unsatisfactory. Once an acceptable offer is made, you would be well advised to have the sale contract prepared or reviewed by a knowledgeable real estate attorney. It would probably be smart to consult with an attorney before hand and have a contract document ready to be completed and signed by the successful bidder.

If you agree to sell to an FHA borrower, you are agreeing to make any repairs that the FHA inspector deems necessary. So make sure your price factors in such items. The buyer traditionally selects the title company/attorney, who performs services for all parties, but in reality represents the buyer.

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Answered on 11/16/99, 5:09 pm


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