Avoiding Double Contracting in a Hot Real Estate Market: What Agents Need to Know

The real estate market moves fast. In a seller’s market, homes can receive multiple offers within hours of listing. This kind of competitive environment is exciting, but it also brings risks—one of the biggest being double contracting.

Double contracting occurs when a seller (intentionally or unintentionally) accepts more than one offer on a property at the same time. It’s a legal and ethical minefield that can lead to disputes, lost commissions, and even lawsuits.

If you’re a real estate professional, understanding how to handle multiple offers the right way isn’t just about protecting your clients—it’s about protecting yourself. In this guide, we’ll break down what double contracting is, why it happens, and most importantly, how to avoid it.

What Is Double Contracting?

Let’s start with the basics. Double contracting happens when a seller, through miscommunication or poor process management, enters into contracts with two different buyers for the same property. This can happen in a few ways:

• A seller verbally agrees to an offer but then receives a better one before signing the contract.
• A listing agent inadvertently communicates acceptance of an offer while still negotiating with another buyer.
• A seller mistakenly signs two separate contracts because they were not properly advised on handling multiple offers.

While many agents assume double contracting is rare, it’s more common than you’d think—especially in a fast-moving market where deals are being negotiated through calls, texts, and emails rather than in formal sit-down meetings.

How Double Contracting Happens (and Why You Should Care)

The speed of today’s real estate transactions has changed the game. With instant messaging and electronic signing platforms, deals move quickly. But that speed also increases the risk of misunderstandings.

Imagine this scenario:

1. Buyer A submits an offer. The listing agent communicates via text that the seller is likely to accept but hasn’t signed anything yet.
2. Buyer B then submits a stronger offer.
3. The seller, wanting the better deal, signs Buyer B’s offer while Buyer A still believes they have a deal.

Now, the listing agent is stuck in a tough spot. Buyer A may have already scheduled an inspection or started securing financing. If the deal falls apart, legal disputes can arise, and the agent’s reputation (or even their license) could be on the line.

The lesson? It’s critical to follow clear, structured processes to avoid putting yourself—or your clients—in a legal mess.

Best Practices for Handling Multiple Offers

If you’re representing a seller in a hot market, your job isn’t just to get the best offer—it’s to ensure the process is legally sound and ethically transparent. Here’s how:

1. Work One Offer at a Time

The golden rule: Do not work multiple offers simultaneously. Until one offer is fully executed, you’re still in a gray area.

• If an offer is countered, do not negotiate another offer unless the first one is officially rejected in writing.
• Do not give verbal confirmations or indications that a deal is “done” before all parties have signed.

2. Always Present Every Offer to the Seller

Some agents may be tempted to filter offers, presenting only the ones they think are most favorable. That’s a mistake.

• Legally and ethically, every offer must be presented to the seller.
• The seller has full control over which offers to engage with and in what order.
• If a seller chooses to reject all offers and request “best and final” submissions, ensure all offers are properly documented and disclosed.

3. Use Written Rejections—Not Verbal

A contract isn’t just a handshake or a text message.

• If a seller receives a better offer before signing another one, the first offer must be rejected in writing before proceeding with the second.
• Avoid giving buyers false expectations with premature approvals or reassurances.
• Electronic communications like emails or texts are convenient, but they don’t replace the need for official documentation.

4. Manage Timelines Carefully

Many double contracting issues stem from timing mistakes. Ensure all offers have:

• Clearly defined response deadlines
• Explicit acceptance and counteroffer periods
• A structured process for handling multiple offers in a way that avoids overlap

A well-structured timeline helps prevent situations where an agent is juggling multiple commitments at once.

5. Stay Professional and Transparent

Trust is everything in real estate. Even the perception of wrongdoing can hurt your reputation. Always:

• Be upfront with buyers and sellers about timelines and competing offers.
• Avoid misleading statements about offer status.
• Keep everything documented—if a dispute arises, you’ll have a clear paper trail showing you acted ethically.

Even if you do all these things right—disaster can still happen. You can still get involved in a dispute. So, you’re ultimate best practice may start with having the right Real Estate E&O Insurance.

How Double Contracting Can Lead to E&O Claims

One of the biggest risks of double contracting is a professional liability (E&O) claim against you. If a buyer believes they were unfairly denied a property due to double contracting, they may file a complaint.

Common E&O risks related to double contracting include:

• Failure to properly reject an offer before moving to the next
• Giving misleading statements about a seller’s intent
• Failing to disclose multiple active negotiations
• Poor documentation of offer handling

Protecting yourself isn’t just about avoiding mistakes—it’s about managing risk proactively. Having the right E&O insurance policy can be the safety net you need in case of an unforeseen dispute.

The Bottom Line: Play It Smart—Protect Your Clients and Your Business

Real estate moves fast, but mistakes can slow you down—or worse, derail your career. Double contracting isn’t just a legal issue—it’s a trust issue. Buyers and sellers rely on you to handle their transactions ethically and professionally.

By following best practices, keeping communication clear, and ensuring all offers are handled properly, you can avoid the pitfalls of double contracting and maintain a solid reputation in the industry.

And if things ever do go sideways? Having a good Errors & Omissions insurance (E&O) in place provides peace of mind. Looking to buy real estate E&O insurance? Give us a call or start your quote online.

The bottom, bottom line: Do things right the first time, and you’ll never have to explain yourself later.