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Psst: Just because there is a spot for it on the purchase agreement it doesn't mean you have to use it! Information for Macomb County MI home buyers

By Kris Wales

Real Estate Agent with Keller Williams Realty - Lakeside Market Center

July 21, 2009 01:40 AM

One of the clauses on our purchase offer form is this (paraphrased):

The offer to purchase will expire on _________ _________. _______.

Notice the blank lines?   That's for the real estate agents and their buyer clients to put in a date in which the offer will expire, otherwise known as "Seller, respond to this offer by this date or we'll go away!".

I dislike this clause. It is confusing to buyers and can cause anxiety in an offer situation where none needs to take place. My buyer clients are sometimes taken aback when I recommend that we leave this blank, until I explain to them my reasoning:

First, it is only an offer. It is not a legal binding contract until the sellers have accepted it.

Secondly, not all sellers are nearby and can respond to an offer quickly. Oftentimes they have relocated, are selling on behalf of an estate, or are bank owned.   Many times they will need to talk with their attorney, accountant or another professional before making a decision on your offer. Why rush them with an expiration date if it is the home that you truly want?

There is no need to have an expiration date on the offer. At any time prior to the seller accepting your offer to purchase you can withdraw the offer.    All it takes is for you to tell me "I'm tired of waiting for an answer, let's move on. Withdraw the offer." and it's done. I will fax and email a withdrawel statement to the listing agent and your offer is no longer available for the seller to consider.

Listing agents (remember, they are the ones who represent the seller, not YOU the buyer) will caution their seller clients to address any offer that they receive in a timely manner.

Once again, if the seller is taking too long at getting back with you, you can always withdraw your offer and move on to another home. The offer is NOT a legally binding contract until it has all parties approval.

~Kris Wales~ A partner for your real estate needs in Macomb County MI

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Gary L. Waters Broker Associate, Bucci Realty

Bucci Realty, Inc. - Melbourne, FL

Eighteen Years Experience in Brevard County

I always fill in the blank with a reasonable time. I first speakwith the listing agent before submitting the offer so as to give an appropriate response time.

Jul 21, 2009 01:47 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

I have never used a "drop dead clause". It's the epitome of "cutting your nose off . . . . . "

All we have to do is have a "Notice" advising the seller that the offer to purchase is withdrawn.

Don't box your buyers and sellers in with artificial deadlines.

Jul 21, 2009 02:05 AM

Brenda Swigert

Keller Williams Associate Partners Realty - West Chester, OH

CRS, e-PRO, SRES

I agree talk to the agent before you write the offer so that you have an idea of how long the parties need to answer the offer.

Jul 21, 2009 02:07 AM

Anonymous

I also agree with talking to the agent and then putting in a deadline. Otherwise I have found that some agents will take forever to present.

Jul 21, 2009 02:20 AM

Jenny Kotulak

RE/MAX Real Estate Centre Inc., Brokerage - Oakville, ON

Broker - Oakville Ontario Real Estate

Hey Kris,

Irrevocable dates, as they are called on our offers are always a bone of contention. As a buyer agent you want to have the offer dealt with asap, as there is always the worry of a competing offer sneaking in. Many times the offer does not get dealt with though before it expires.

If the intent is still there the time is desregarded and the signing party can extend it on the counter offer. Many of our listings will say 24 or 48 hour irrevocable for offers if the seller is out of town or if it is a bank that owns the property.

I always say time is of the essence. Occasionally we will get a seller who will want to sit on the offer and not respond in a timely fashion. In that case we always get a little suspicious that something is going on in the background.

Great topic kiddo.

Jul 21, 2009 02:56 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Gary, I leave it blank unless my buyer client specifically wants an answer within a set time frame. Otherwise we leave it open. Like you though I always ask the listing agent if the sellers are in town, or if there will be a delay of any kind in getting a response.

Lenn, That's exactly how I feel...as if it's cutting off the nose to spite your face. Most of my buyer clients won't make an offer on a house unless they love it. I've always felt that giving a deadline for the seller to respond pressures the seller and most times they'll come back with a counter offer instead of taking their time and perhaps accepting the offer as it was written. (My last 3 buyer contracts all came back accepted as written, no counters, and no timeframe for the seller to perform. I think it works.)

Brenda, Oh, absolutely. Having a clue from the agent helps tremendously to prepare our buyers for a timeframe to expect. Thanks so much Brenda.

Unknown, I don't think it's the agents taking forever to present, it's the circumstances of the sellers in my area. (Your area may vary) Agents here know that there are a hundred homes for a buyer to see. If the seller (or the agent) takes too long the buyer will walk on down the street to the next home.

Jenny, It sounds like you conduct business in your neck of the woods much the same as I do in mine. I always point to the "time is of the essence" clause and explain to my buyers that I hope the listing agent will do the same with their clients. Not often here do we have a seller taking their time to dawdle over an offer. They know they are few and far in between. Thanks Jenny.

Jul 21, 2009 08:17 AM

Mike Mitchell

Kee Realty - Saint Clair Shores, MI

REALTOR (R)

Kris - sorry but I think this is one time that we disagree as I always put a time frame on my offers when working as a buyers agent. I do not feel it pressures the sellers as I too always call the listing agent first to find out the sellers availability situation and then I usually give them 36 to 48 hours to respond. I feel that I'm looking out for my buyers best interest this way just incase they decide to sit on it for whatever reason and another offer comes in.

Great blog topic and you make some good points.

Jul 21, 2009 08:49 AM

Mike, It's fine that we disagree :-) Everyone conducts their business differently and advises their clients differently. Naturally if my buyers have a firm time frame that they want to adhere to, then we'll put a date on it. Otherwise I don't advise to do it based upon my reasons above. Also, I haven't had a seller yet take their time on answering an offer to purchase (not in the last year :-) because they know they are so few and long in coming. Most sellers won't take a chance of losing a good buyer by dawdling!

Jul 21, 2009 09:08 AM

Psst: Just because there is a spot for it on the purchase agreement it doesn't mean you have to use it! Information for Macomb County MI home buyers

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