You’ve heard it or you’ve had to deal with it: signing a contract on a house only to have another buyer come in and sweep your offer out from under the table.  Is it legal for the seller to cancel the contract in favor of a bigger outside offer?  In a traditional home sale, to make contracts legal and binding it takes both parties to sign.  In non-traditional or distressed home sales, like short sales, having both the seller and buyer sign is not enough and does not make the contract binding: in those cases, a third party lender must also approve the offer and sign.  In the cases of short sales, a buyer with a bigger offer could be chosen over you because not all parties have signed the contract.