05 October, 2013

Can a Seller Accept Another Offer Before A Counter Expires?

A counter offer usually gives the buyer an expiration date and time by which to accept the terms of the seller's counter. Some buyers and their agents interpret this as having until that specified time to respond, sign the counter and have automatically a valid, binding and enforceable contract. However the counter offer form that we use in our local market states that: “Seller has the right to entertain and to accept other offers at any time prior to actual contract formation herein, unless there was a proper delivery and personal receipt of executed documents.”

This provision gives the seller the right to ratify another offer and cancel any outstanding offer at any time prior to the delivery and receipt of the signed counter offer from the other party.  Signing the counter is not sufficient.  In order to create a valid contract; there must be proper “delivery” of the acceptance (i.e., the signed counteroffer) to the seller as stated in the contract. Offers and counter offers can be revoked even though there is time remaining before they expire.

The purchase agreement requires that the signed offer or counter offer be delivered and “personally received" by the principal or the designated agent or brokerage, depending whether the agent inserted the agent's name or the company name in the blank.  This, then, makes “delivery” conditioned upon the recipient actually receiving it.

Time is of the essence. Buyers should review the counter offer with their agent as soon as possible after receipt. Buyers should also make sure that ALL terms are understood before they sign the counter offer and act quickly if they wish to buy the house.

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