Written by: Zak Khan of REW
You can pull back your offer to buy a home, just be aware of when and how.
What does it mean when someone revokes an offer during a real estate transaction? Simply put: if a buyer revokes an offer, they have cancelled the contract that they had sent to a seller, signed and agreed on. Until you have signed back, texted or emailed that you have accepted the offer, the buyer can pull it back legally. Further, as the seller, you can also pull back any signed counter-offers until the buyer accepts.
An example of revocation.
Let’s say you are a seller and an offer has come in on your listing at $800,000 (offer number one). You and your real estate agent counter that offer to the buyer at $810,000. This is a signed counter-offer from you, the seller.
Next, another agent sends an offer at $830,000 (offer number two). Obviously, as the seller you want to accept offer number two. If offer number one has not responded to your counter offer and has not signed or acknowledged they will be accepting your offer, you can revoke your last counter as the seller. But you need to do it fast.
You, as the seller, need to email, text and then call to confirm that you are officially revoking your counter-offer. This officially cancels your counter offer to number one. Their agent may say you cannot do that and it is illegal. Your listing agent can tell them you are sorry, but it is legal and we do have another offer which is why we are revoking. It is not a nice feeling when you have to do this, but the listing agent’s client (you) and your money come first.
You can still look at both offers at this point and deal with it as you please. Typically offer number one will be upset and not want to offer again. The good news is that offer two is ready to go.
Lessons in real estate and offers.
What has all this taught us? For sellers, remember to act fast. If you receive news of a higher offer from another potential buyer and your first buyer hasn’t responded yet, you only have a short window of time to act.
Therefore, as a buyer, if you are going to accept a seller’s counter offer, do it quickly. Because before you know it, it can be taken away from you. Your agent should be able to get you the contract within seconds of receiving it from the other party. If your agent cannot use an online signing system, you may want to send them links to Docusign or Authentisign ahead of any such circumstances. In a market of multiple offers, things change quickly.
On the other hand, if you are the kind of buyer that has sent a subject-free offer to the seller and you get cold feet, you can also revoke your offer if you move fast, too. This happens much more rarely (because subject-free offers are rare) but it does happen. That is because, if you have subjects on your offer as a buyer (the much more common scenario), you can walk away from a property at any time during the subject removal process, or during the rescission period in case you change your mind later. So early revocations are probably less of a concern for you.
Most importantly, before you decide to revoke an offer or counter-offer, a quick phone call to your lawyer is always a good idea, just in case. Make sure you work with an informed agent along the way, and remember to be as polite and respectful as possible if you do decide to revoke an offer.
