Several buyers for the same home: when is it really yours?

An accepted bid is not a sale. Even if the seller says yes to your price, no binding agreement has been made until both you and the seller have signed the purchase agreement (købsaftale). If you have signed but the seller’s signature is still missing, the document is only an offer to the seller, and it can be withdrawn until the seller has accepted it.

Verbal assurances do not change anything legally either. The seller’s verbal acceptance, or the estate agent saying that “it’s in the bag”, is not binding until there is an agreement signed by both parties. Only once both signatures are in place is the agreement binding, and the seller cannot simply pull out because a better bid turns up later.

Once you have both signed, you generally have a statutory right of withdrawal (fortrydelsesret) of six working days. Reservations (forbehold) may also have been agreed, for example a lawyer’s, adviser’s or bank reservation, which must be resolved before the purchase is completely final. A bidding round (budrunde) ends precisely when the seller accepts one bid and signs the purchase agreement with the chosen buyer, and only then is there a binding agreement.

The rest of the article is about when a home purchase is binding in practice. It covers the rules of the bidding round, the estate agent’s role as the seller’s representative, the terms that matter besides the price, and the final practical steps towards a completed purchase.

How a bidding round on a house with several buyers works

When several buyers come forward for the same home, the seller can choose to hold a bidding round. This typically happens with a highly attractive property or a luxury property that is hard to price, and the rules are laid down in Executive Order no. 321 of 29 March 2007 on the sale of real property by bidding round.

A bidding round is an invitation to interested buyers to submit an offer within a set deadline, on the same terms except for price and handover date. The seller can choose this format from the outset, but can also wait to use it until several interested buyers turn up. Whenever the decision is made, the same rules apply.

A bidding round must be carried out on a uniform, transparent and clear basis for all interested buyers. In other words, you should not have to guess at the terms while others have better information.

The sales material must at least include the sales brochure and a draft of the standard purchase agreement, so you can see what you are actually bidding for.

If the home is covered by the Danish home inspection scheme (huseftersynsordningen), the condition report, the electrical installation report, information about change-of-ownership insurance and the seller’s declaration that they will pay half of the change-of-ownership insurance premium must also be available from the start of the bidding period. Together with the purchase agreement, you receive a bid form, and the detailed rules for the bidding round must be set out on that very form.

In practice, the bidding period usually runs for at least 3-4 weeks. During this time, you can inspect the home with a building surveyor and get both legal and financial advice before you commit to anything.

While the bidding period is running, the seller and the estate agent may not negotiate with interested buyers, nor may they sell the property. Only when the bids are opened does the agent enter all bids received on time in a bid log. If the seller chooses a bid, the other bidders receive an anonymised copy of the bid log once the chosen buyer’s withdrawal period has expired. If the seller rejects every bid, the agent must notify the bidders immediately after the acceptance deadline has passed and at the same time send them the bid log in anonymised form.

This is exactly the part many people misunderstand: a bidding round on a house does not work like an auction. You are not told what others are bidding while the bidding round is running, and the estate agent may not create a bidding war by playing buyers off against each other. No bell rings, and no one tells you along the way that you are about to be outbid.

You submit your bid on the terms set out in advance, and then it is up to the seller to choose.

If only one bid has arrived on time when the bidding period ends, the bidding round lapses. You are then not bound by your bid, but can instead negotiate with the seller on the basis of the asking price. In that situation, you are also not obliged to pay the seller 1 % in compensation.

The estate agent represents the seller and has a duty to give fair information

The estate agent is hired by the seller and represents the seller’s interests throughout the process, from the first advert until the sale is completed. The agent is not your adviser, nor a neutral third party weighing both sides equally. If you have your own buyer’s agent involved, the role is different: that agent looks after your interests as the buyer and no one else’s.

The estate agent must not mislead you. The agent represents the seller but is also obliged to pass on every bid to the seller and to ensure a proper and transparent process. This applies whether there is only one interested buyer or several are competing for the same home. Everyone must be treated by the same rules, and no one should be able to accuse the agent of holding back information or playing favourites.

There is, however, a clear limit to what the estate agent may tell you. The agent may not reveal another buyer’s terms. You get the same information about the home, the conditions and the deadlines as every other bidder, but you are not told what a competitor has bid or which reservations they have made. This is not to keep you in the dark, but to make sure the bidding round does not turn into a game where one buyer bids higher on the basis of another buyer’s figures.

During the bidding period itself, another set of rules applies. The estate agent must keep all bids secret so that no one has access to their content, and that includes the agent. Only when the bids are opened can they be read and compared. All bids received on time must then be entered in a bid log. This order of events helps ensure that no bidder has been favoured along the way and that the seller has a complete picture to choose from.

When the estate agent will not tell you what the others have bid or how close you are, it is not an attempt to pressure you. It is the rules being followed. You are dealing with someone who works for the seller but who must also treat you fairly and keep the process open and transparent.

Price, handover and reservations: what decides a bid besides the money

The seller is not obliged to accept a bid. This applies even if you bid exactly the asking price. The seller is free to choose between the bids received or to reject them all, and there is no rule saying that the highest bid wins. When you work out how far you can stretch, you should therefore also think about the other terms of your bid, not just the price.

Besides the price, the seller may attach importance to several other things. In a formal bidding round, the terms are the same for everyone except price and handover date, so the points below apply in full when several buyers bid without a formal bidding round:

• When you can take possession of the home, and whether the date fits in with the seller’s own plans

• Whether you need access to the home before the handover, for example for tradespeople

• Whether you have proof of financing ready, showing that the bank has approved the amount

• Which reservations you make, and how hard they are for the seller to accept

• How quickly you can actually move if the seller wants the deal closed

A strong bid is therefore rarely just the highest one. A buyer who can take possession on a date that suits the seller, has the financing in place and makes few reservations may well be in a stronger position than one who bids a little more but wants to drag everything out.

Once you have signed the bid form, the bid is binding on you. You can only withdraw it or replace it with a new bid if your withdrawal or new bid reaches the estate agent before the bidding deadline expires. After that, you are tied to the bid until the acceptance deadline runs out or the seller rejects it, so only sign when you mean it.

If the seller replies with something that looks like a yes but changes or adds a term, it is as a rule not an acceptance but a counter-offer. If the seller moves the handover date, changes the price or rejects one of your reservations, your original offer has been declined. You are no longer bound by the old bid, and instead you have a new offer in front of you that you can decide on yourself.

The purchase agreement is signed: reservations, right of withdrawal and compensation

Once you have a signed purchase agreement for the home in your hand, the purchase is legally in place. This is the point where you can no longer back out just by saying no thank you, but you are not without options either.

As a buyer, you generally have a statutory right of withdrawal when buying a home, lasting six working days after the agreement is made. The deadline starts to run from the moment the binding agreement comes into being. Saturdays, Sundays, public holidays and Constitution Day do not count as working days, so do not assume that six days means a week. In calendar time, it can easily take longer.

If you want to use your right of withdrawal, the notice must be in writing and reach the seller or the seller’s estate agent before the deadline expires. It is not enough to send it at the last minute if it does not arrive in time. In an ordinary sale, you must also pay the seller 1 % of the agreed purchase price as compensation at the same time. This amount is statutory compensation, not something to negotiate, and it must normally be paid before the same six working days run out.

The two go hand in hand. If you do not pay the compensation before the deadline expires, the right of withdrawal lapses and the purchase stands. You cannot withdraw retroactively afterwards.

There is, however, a way around the 1 %. If the purchase agreement contains a lawyer’s or adviser’s reservation, you can withdraw from the purchase without paying any compensation at all. This is the clause that lets you walk away if your adviser does not approve the purchase, but the reservation only works if its wording actually covers your situation and if you notify the right recipient before the agreed deadline. A reservation that is worded too narrowly, or a message that ends up in the wrong place, will not help you.

The adviser’s reservation is an agreed term, not the statutory right of withdrawal. The two exist side by side, and each has its own deadlines and conditions.

Things are different for the seller. As a rule, the seller cannot back out of a signed purchase agreement without being financially liable to you. This also applies if a better bid turns up later. The right of withdrawal belongs to the buyer, and the seller has no equivalent general right to pull out once the signature is in place. That is the protection you have once you have committed to a purchase: the other party is just as bound as you are.

Waiting times, condition reports and what you can control yourself as a buyer

Some time may pass between the bidding round being decided and the purchase agreement being ready to sign. A condition report or electrical installation report may have expired and need renewing before the purchase agreement can be drawn up. It is a purely practical delay and says nothing about whether you will get the home, but it does mean there may be days when you hear nothing concrete.

Use the waiting time to have your adviser go through the documents and to get your financing finalised, so you are ready to sign when the purchase agreement is ready.

Part of the process is yours to control, whatever the seller and the estate agent do:

• Have your own proof of financing ready, so you can document that your financing is in place

• Bring your own buyer’s adviser if you want someone to look after your interests throughout the process

• Communicate in writing, so agreements, deadlines and reservations are in black and white

• Set clear deadlines for your own reservations, and keep an eye on when they expire

These four things are no guarantee that the seller will choose you, but they remove uncertainty on your side. Having proof of financing ready and an adviser who has read through the agreement makes it easier to answer quickly when you are asked.

It can also look confusing that the home is still shown as active on the property portals even though negotiations are under way. That is not necessarily a mistake. Until the purchase agreement has been signed by both you and the seller, the home is still for sale and can still be shown to others.

When you see the listing still there unchanged, the active status does not mean your deal has fallen through, but nor does it mean the purchase is locked in for both parties.

If you also need to sell while you are buying, you can get a free valuation of your current home from Brikk.