You suggested that the seller realized they underpriced it?
How common is it for a lawsuit to come from turning down a full price offer?
One thing I definitely see is real estate agents encouraging clients to list a house too low. Presumably, they will take the loss of a small part of the commission, just to achieve it quickly.
On two occasions, I have heard sellers tell real estate agents that what they are suggesting as a listing price is too low. The agent tells them something like, that's fine, we'll list it at that price to provoke intertest, and we'll end up selling it for more.
flamberge , Responsibility2nd if the agent said something like that, will it impact the lawsuit? Because they are portraying the asking price as a strategy, and they don't say you will be required to take an offer at this price, no matter what the small print says.
Legal advice from the internet is generally worth what you pay for it. And I am not a lawyer.
Having said that, the short answer is "NO". I expect that the listing contract can be enforced as written, and the agent suggestion that the seller could hold out for more than the listed price is meaningless. Or worse, a deliberate deception. You must get these kinds of assurances written into a contract or they don't exist. But people sign bad contracts all the time based on wishful thinking and deception. It is a bad bet that the courts will get them off the hook.
And I would run, not walk, from an agent who suggested a "lowball price to provoke interest". There is nothing in the real-estate market that works that way. You would need very specific language in a contract to specify a minimum acceptable price, and a lower "bait price" for listing.
Most likely, this would be considered an unlawful and deceptive trade practice, depending on in which State the sale is located. Check with your lawyer if you want to stay out of jail.
What you could do is set up an auction with a specified minimum price and a time period in which the highest offer above that price will be accepted. That works in some markets. It fails in others.
What works in all markets is to set a highball price and then consider lower offers. There is always somebody who wants to play "Let's make a Deal".
Because the buyer attached some expensive conditions to the offer. (Put on a new roof, the old one is at end-of-life). It is not really a full-price offer when that happens, and the seller has an option to refuse the deal. Or make a counterproposal.
You suggested that the seller realized they underpriced it?
Maybe the seller did underprice the house. Too bad for them. But even very experienced real-estate professionals can make large mistakes estimating the value of a property. It is almost always better to close the deal and move on.