Home Buyers: Contracts, Counters and Response Times
This article authored by: Rob Hallberg
In today’s real estate market there are more Buyers than there are homes for sale. As multiple Buyers often compete for properties, close attention must be paid to deadlines and contract acceptance. Here are a few points that cover some issues that were discussed in a recent meeting:
Response Time Deadlines: A section of the Purchase Contract requires that the Seller respond within a certain time period or the offer is void. As a courtesy, most Buyer Agents recommend a 24 hour response time period.
Let’s assume you are a Buyer and have submitted a full-price purchase contract without any Seller concessions. In other words, your offer is exactly what the Seller would like to receive and accept. Your offer was received after the home had only been on the market for one day, so the Seller decides to counter your offer at a higher purchase price.
What??!! You thought this purchase was a “done deal”. How can the Seller do that? Well, they can. Unfortunately, submitting a Full-Price Offer does not guarantee acceptance…but it helps!
Now let’s add another Buyer to the scenario. If a second purchase contract is received by the Seller prior to responding to your offer, the Seller may accept the new offer or decide to counter both offers. Buyers must receive acceptance in writing before they are locked into the purchase.
Counter Offers: A Counter Offer is filed by a Buyer or Seller to alter the terms of the Purchase Contract. Most Counter Offers are for the Purchase Price, but Seller Concessions, Home Warranties and the Closing Date are also terms that are countered. Both the Buyer and the Seller must agree, in writing, to the changes before the purchase has been completed. Similar to the Purchase Contract, the Counter Offer form also has a Response Time Deadline.
Let’s assume you are the Buyer and have received a Counter Offer to the Purchase Contract you submitted. You decide the Seller’s Counter Offer is a little high, so you submit a Counter to the Seller’s Counter Offer. The next morning the Buyers have a change of heart and decide to accept the Seller’s original Counter Offer. They call their Agent and request the Counter Offer be rescinded.
Unfortunately, the Seller received another offer this morning and decided to accept that. The Buyer thought they were in a “first” position as they “almost” had an offer as they were in an Offer/Counter Offer mode. Sorry. The Seller is under no obligation to any Buyer until the contract and counter offers are fully signed…and delivered!
Recommendation: Be quick to respond to Offers and Counter Offers. Although you may have a 24 hour response time, that is meaningless until you respond.
Rob and Catherine Hallberg are Associate Brokers with Long Realty, a Berkshire-Hathaway Affiliate and Southern Arizona’s largest Brokerage. Send Rob and Catherine an email for a fast response to your questions; for an even faster response, Call (520) 407-8667 or Text (520) 203-2031.