It's Called Gazumping [Negotiation]

After going under contract, a negotiated breakup fee allows British house sellers to continue marketing their property to other potential buyers.

Why don't we do this here? In some cases, we should.

From HBS's Working Knowledge, The New Deal: Negotiauctions -

Take buying a house, which for many people is the most important transaction in their lives. In the United States, a house purchase is a very "tight" deal—once the seller commits to a particular buyer, the seller can't (legally) sell the house to someone else, even if the person offers a substantially higher price. In many cases, that's the right deal structure, because the buyer needs certainty in order to arrange the financing, prepare for the move, etc. But in some cases both the buyer and the seller might prefer a "looser" deal—for example, a deal in which the seller can back out at any time between the signing and the closing by paying the buyer a "breakup fee," which might compensate the buyer for out-of-pocket expenses. The seller gets the ability to shop around. The buyer might not mind renting for another year, or buying the house down the street instead, particularly if he gets a big breakup fee out of it.

If all this sounds too crazy to work, it's actually the default in the British system. In the United Kingdom, the seller has the right to sell the house to someone else up to the moment of closing. So it's an incredibly "loose" deal, in which the buyer engages in a mad dash from signing to closing in order to avoid getting "jumped." The British even have a term when someone else jumps your deal—it's called "gazumping." You can even buy gazumping insurance against getting gazumped.

In Colorado, the standard Real Estate Commission approved contract is slanted towards protecting the buyer. Yet there's nothing preventing a seller from offering a a breakup fee in exchange for loosening the terms of those protections. For sellers who are considering accepting a price lower than they believe is fair value, or are actively negotiating with more than one potential buyer, a Gazump clause is something to consider.

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