A contract race occurs when two parties have made an offer on the same house. These offers will usually be for the same price. The vendor will then sell to the person who exchanges contracts ahead of all other parties in the race. If this situation does occur, all parties involved must be made aware that more than one contract has been issued. The seller is not under any legal obligation to exchange contracts with the first person to make a suitable offer, hence why a contract race can occur.
This scenario does not always occur, as it is likely that one party will marginally increase their offer to make it more attractive to the vendor. In this case, the vendor would likely accept the higher offer, knocking the other party out of the running.
There are some elements to consider here if you are selling a property and you are considering entering a contract race with two or more parties. Firstly, there are additional fees involved for you. With more than one contract to send out, there is more legal work to be done. That raises the fees, and it is something you should be aware of before proceeding.
Secondly, while a contract race might lead to a faster sale to one of the interested parties making an offer, this is not guaranteed. It is still possible the sale could fall through. It is also worth noting that not all parties might agree to be in such a race. It could put one or even all the potential buyers off making an offer at all. So, think carefully and weigh up the pros and cons before proceeding with a contract race.