When can I withdraw an offer?
You can withdraw an offer to purchase property at any time up until it has been accepted by the seller and the signed acceptance has been delivered to you or to your agent.
The delivery aspect is critical. Let's say you make an offer on a property. The seller takes several days to decide, then signs your offer. Meanwhile, you find another house you like better and decide you don't want to buy the first house. If your agent notifies the first seller's agent that you are withdrawing your offer before that seller's signed acceptance is delivered to you, or to your agent, then your offer is safely withdrawn.
To avoid any confusion, it's best to give written notice that you're withdrawing an offer. When the withdrawal notice is delivered to the sellers, to their agent, or to the agent's realty office, make sure that someone gives you or your agent a receipt for the notice.
Offers to purchase property are rarely accepted without modifications. Any change to an offer creates a new offer, called a "counteroffer." Like an offer, a counteroffer can be withdrawn by the seller at any time before it is signed by the buyer and the signed acceptance is delivered back to the seller or his agent. Likewise, if the buyers counter back to a seller's counter, this institutes a new offer to the seller. Again, this counteroffer can be withdrawn by the buyer at any time before it's signed-and-signed acceptance is delivered to the buyer.
There is no limit to how many times buyers and sellers can counter back and forth before they either come to an agreement or until they decide that they can't reach an agreement. Each counteroffer opens up a new opportunity for either party to withdraw.
When buyers and sellers agree to all the terms of a purchase offer and it has been signed by all parties, the contract is said to be "ratified." A ratified offer is a legally binding contract.
FIRST-TIME TIP: While it's easy to withdraw an offer before it's accepted, withdrawing from a binding contract is a different matter. The purchase contract should indicate the terms under which either party can withdraw from the agreement.
Purchase contracts usually include contingencies that must be satisfied before the transaction can close. "Closing" refers to the transfer of title from the seller to the buyer. Most contracts include financing, inspection and title contingencies to protect the buyers. If the buyers, after diligent effort, are unable to satisfy a contingency, they can usually withdraw from the contract without penalty and get their deposit money back.
jTC But if either the buyers or the sellers withdraw from the contract ++ for a reason that's not provided for in the contract, there can be serious financial and legal repercussions. Buyers who withdraw may risk losing their deposit. The sellers also might be able to bring suit.
Sellers who withdraw from a binding contract could be sued by the buyers, either for damages or for specific performance.
THE CLOSING: Even if you think you know what's at risk if you withdraw from a binding real estate purchase contract, it's wise to consult a knowledgeable real estate attorney before taking such action.
Dian Hymer's column is syndicated through Inman News Features. Send questions and comments care of Inman News Features, 5335 College Ave., No. 25, Oakland, Calif. 94618.