Q: If I put in an offer on a house with a real estate agent and the seller doesn’t give me an answer in five days, can I pull the offer off the table? –Ron
A: You’re looking for my opinion, so you’ve likely been reading this column long enough to know me. So, as always, first I’m going to give you the answer to the question you asked — the question of whether you "can" take your offer off the table. Then I’m going to give you the need-to-knows to help you make the right decision for your situation on the question you didn’t ask: the question of whether you "should" take back or rescind your offer. Buckle up.
We often think of real estate as a super-special field of rules and arcane practices of its own, but in many ways, what buyers and sellers can and cannot do is governed by traditional guidelines of contract law. This is especially so when it comes to the rules of contract formation.
The offer you submitted becomes a contract only when either (a) the seller accepts the terms of your offer, OR (b) you both accept the terms of the offer as modified by later counteroffers AND (c) the seller’s agent has communicated that acceptance to you, either directly or via your agent.
In real estate, buyers often make offers (and sellers often make counteroffers) that include a time frame during which the offer will stay open. However, whether or not your offer gave a time frame, until the seller has accepted your offer AND communicated that acceptance, your offer is only an offer, not a contract, and is not binding on you.
At any time, then, until you or your agent is notified that the seller has accepted your offer, you have the right under contract law to rescind, or withdraw, your offer. Once you decide to do that, you should state your rescission in writing and have your broker or agent deliver that to the listing agent immediately. You never know when the seller will sign and fax the acceptance back to you.
Further, most real estate purchase contracts include a contingency or objection period in which the buyer has the right to cancel or back out of the deal for a wide range of reasons within a certain period of time following the contract’s formation, while recouping his or her deposit. The sooner you know that you want or need to cancel a contract, the sooner you should notify your agent and the seller, both to allow the seller to resume marketing her property to find another buyer, and to avoid deposit disputes.
Five days sounds like a long time to have an offer out there in the ether. However, before you rescind your offer out of frustration with the seller’s or the agent’s nonresponsiveness, know that there are some situations in which five days is reasonable.
For example, with corporate sellers, like relocation companies and banks who own foreclosed properties, it may take even a week or more for your offer to work its way up the authority chain and to receive a substantive response. Also, in situations where siblings are selling a deceased parent’s home or a trust or estate is the seller, receiving an answer can take some time.
Finally, in short sales — homes that are being sold for less than the seller owes on them — buyers often receive an acceptance from the seller immediately, but may wait five days or five months (I’ve even seen them wait eight or nine months) to receive an answer from the seller’s bank(s), which must green-light the transaction for it to proceed.
I’ve even seen individual sellers who are traveling, divorcing or receiving an offer very close to what they owe on the home take a long time to respond to the buyer’s offer, for valid reason.
If you are rescinding your offer to chase a better property or a better deal, or for other personal reasons, go for it. But if you’re acting out of frustration, have your agent investigate and bring back to you the seller’s reasons for a slow response; you might find them justified and decide that the waiting is worthwhile. Of course, you might not, but you should ask.