Time Limit of Offer and Notice to Withdraw
This super-hot seller’s market just keeps offering challenges.
Here’s a new example we should be watching:
Trying to be the offer that gets accepted, a Buyer makes an offer with no due diligence and no time limit for acceptance of the offer. The Buyer did not win the multi-offer situation initially and went under contract on another house. Three weeks later, the listing agent sent over an acceptance of offer. The Buyer had to cough up earnest money on that deal which, of course, the Buyer lost when they couldn’t perform on both deals.
No Time Limit for Acceptance of Offer
The mistake? The time limit of the offer was open and the offer was not
withdrawn. Under contract law, an open time allows an acceptance for a
reasonable time period. Whether or not the time period is reasonable, however,
is a question of fact for a judge or jury. It depends on the situation. Had the
buyer sent a Notice to Withdraw Offer prior to submitting another offer to another
seller, the buyer would have been protected against acceptances on 2 contracts.
(Guess who the Buyer is going to be pointing the finger toward?)
Time Limit Not Expired
The same holds true even if there is a time period for acceptance in the Offer, but
the time period has not expired. Again, send the Notice to Withdraw Offer before
a second offer is made.
Time limit Expired
Of course, if the time limit for acceptance of the offer has expired, the offer is no
longer open for acceptance. Any acceptance after the time limit has expired is
legally a counter-offer. There is no need for a Notice to Withdraw Offer, if the
offer has expired.
Moral of the story: If your buyer has made an offer with no time limit for acceptance or has made an offer with a Time Limit that has not expired, send a Notice to Withdraw Offer prior to the Buyer is making an offer on another property.
The form is GAR F285 Notice to Withdraw Offer and the content is:
Buyer hereby gives notice to all parties of the immediate withdrawal of the signer’s last offer or counteroffer to purchase the above referenced Property. It is the intent of the signer(s) that upon the delivery of this notice to the other parties, no offer(s) or counteroffer(s) of Buyer to purchase the Property shall remain open for acceptance.