Certain eBay online auctions involve non-binding bids (for example, some real estate auctions and motor vehicle listings). Non-binding bidding isn't a formal contract between seller and buyer, but it does represent a buyer’s serious expression of interest in buying the seller’s item. Insincere bidding isn't permitted.
Violations of this policy may result in a range of actions, including:
Limits on account privileges
Forfeit of eBay fees on canceled listings
Loss of PowerSeller status
Non-binding real estate auctions are described in greater detail in Real Estate Rules.
Mary is selling her house and has received many bids on the property. The listing closes with a high bidder and Mary is ready to close the sale. Unfortunately, the high bidder decides not to complete the transaction. Upset with this buyer, Mary tries to file for Final Value Fee credit through the Unpaid Item process. Mary, the seller, is in violation of the non-binding bid policy because bids on real estate are not contracts.
Example of a binding bid: Steve is bidding on a new rug for his living room and he wins the online auction. Later, he finds out that the rug is not big enough to cover his floor and he wishes to back out of the transaction, claiming the bid was non-binding. Steve, the buyer, is in violation of the Unpaid Item policy because the rug he was bidding on isn't covered under the non-binding bid policy.
Why does eBay have this policy?
In most cases, a bid on eBay is a legally binding contract between the buyer and the seller. Due to state laws and complexities in certain real estate transactions, bids on some categories of Real Estate and motor vehicles on eBay are non-binding.
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