Is there a form to use when withdrawing an offer?

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02/03/2017 | Author: Editorial Staff

My client has submitted an offer to purchase a home. We have not heard from the seller or his agent regarding the offer. My client has now found another home that he likes better and wants to withdraw the first offer. Does the Texas Association of REALTORS® have a form that we can use to withdraw an offer?

No, the Texas Association of REALTORS® does not have that kind of form. Since your client wants to withdraw his offer before the seller has accepted it, a prompt communication of that withdrawal is essential. Call the listing agent and tell her about your client’s decision to withdraw his offer. Follow the telephone call with a letter or email confirming your telephone notification of the time and date of your client’s withdrawal of his offer. This kind of written confirmation of the verbal withdrawal of the offer can help document the timeliness of the withdrawal should an issue develop concerning the seller’s possible argument that he had already accepted the offer.

It should be noted that this same procedure could be used by a listing agent where the seller wants to withdraw a counteroffer made to a buyer so that he can sell the property to another buyer.

Categories: Forms, Legal
Tags: legal faq, legal, forms


Comments

David Davis on 02/10/2017

Dave Turnquist,
That’s about the only thing I think that is “safe” to recommend to a client to put into “Special Provisions.”

There has been considerable talk in the Broker-Lawyer Committee about reducing the space in Special Provisions so that some of the crazy obscure language that lands there won’t any longer.

Dave Turnquist on 02/10/2017

Paragraph 11, Special Provisions.  “This offer VOID if not signed by both parties and executed by midnight on xxxxx date”

Doesn’t this solve the problem? The offer is valid until a specified date and time. Since the buyer would have already signed the offer if the seller fails to meet the deadline specified in paragraph 11, the offer is automatically void.

Since there is no FORM or other place on the contract to indicate this, paragraph 11 is the logical spot for it. This prevents sellers from “sitting” on contracts and waiting for something better to come along.

If the seller agrees, the contract is signed and dated and we move on. Otherwise it expires on its own. If there is some legal reason we can’t do this I’d like to hear the explanation.

David Davis on 02/10/2017

Well Rick, while not an attorney either no, it doesn’t take the Buyer’s Agent to fill in the Executed Date to make the contract binding.  In fact the listing broker can fill that date in.  Happens all the time.  What makes a contract binding?  Mutual “meeting of the minds of the parties.”  We’ve had that discussion too many times elsewhere.  Once those parties sign that contract, and notice of same is given, it is binding.  Licensees need to quit trying to play GOD in transactions and do what the principal tells them to do, or what is in the best interest of the principal.

As for the earnest money discussion, yes $0 is allowable(doesn’t effect the contract).  Probably not acceptable (by the seller, that is) in many markets nowadays, but allowable.  I just get so frustrated seeing all these crazy misconceptions about misinformed timelines (2 days, 3 days, etc.)  read the contract.  It says it right there in BLACK& WHITE “UPON EXECUTION.”  I wish someone would explain to me how that gets turned into X number of days or hours!  But I will admit, it was a fair attempt at the old “front door -vs- back door trick” by the person who tried it in this tread.  Sorry, we no longer call it that nowadays.  Now they call it “off topic” or “irrelevant.”  (I hate that word-sounds like lawyer gibberish!)

Rick DeVoss on 02/10/2017

When a buyer sends an offer to a seller, it shows his intent to enter into a contract.  When the seller agrees to that offer, it shows his intent to enter into a contract.  But either party can change their mind before the contract is executed and accepted by both parties.

The practice by agents in the real world is not the same as what was intended by the lawyers who drew up our contract forms.  We tend to short circuit the process because WE want to put the contract to bed, when in reality it is up to the principle parties to mutually do that.  ~If you will read what it says by the Date of Execution on a TREC contract, the Last Broker who accepts the offer back is the one who fills in the “execution date”.  This means that an offer signed by a seller is NOT a contract until it is accepted by the buyer, (or the buyer’s agent.)

So any buyer can say “I want to buy your house”, and submit the terms of his offer, but he also has the right to change his mind and say I no longer want to buy your house.  And just because the seller may have signed that offer, does Not make it an executed contract.  —-The Seller’s Agent should Never put the date on the TREC forms.  It has to go back to the Buyer’s Agent and be “accepted” before it becomes an executed contract.

(Now I am not an attorney, but I would like someone who is to back me up on this.)
Why are our TREC-approved instructors not teaching this to all new agents?
Why are our Brokers not enforcing this?

Can we please not confuse the issue with a discussion of “earnest money”??  Since earnest money is not required to have a valid contract, it has nothing to do with the withdrawal of an offer.

Withdrawing a written offer is the same thing as submitting a written offer.  The buyer should announce his decision to withdraw in writing.  It does not need to be “a Form” because it does not require the seller’s signature nor his acknowledgement.  As the Buyer’s Agent, you simply want to document that your buyer has decided not to buy that house.  A phone call might be a polite way to notify the seller’s agent of what is going on, but the buyer Must put it in writing if you want to document it legally.  Personally, I would not rely on a text.  Send the withdrawal in the same format in which you sent the offer.

And for those agents who are worried about the earnest money, we’ve had another discussion on that topic.  You could enter “Zero” in the first line of Paragraph 5, and then put in the amount and date when you plan to deposit the amount for earnest money in blanks #4 & 5.

What happens if you fail to deposit the earnest money?  —The buyer is in default.
Do you still have a valid contract? —Yes!

What happens if the buyer fails to deposit the option fee?  —The buyer no longer has an option to terminate.
Do you still have a valid contract? —Yes!

If you are going to expect to earn money by getting your customers & clients to sign contracts, it behooves you to Read the contract first.

 

Brian Cooper on 02/09/2017

Kathy- The seller’s use of the rejection- invitation form simply lets the buyer know he is not accepting the buyer’s offer. (and may let the buyer know what is acceptable). I would consider THAT a pure rejection. The buyer , on the other hand, has an offer that is in the seller’s possession.  The buyer could leave it in the seller’s possession for future consideration (probably a really, really bad idea) , withdraw it and move on or withdraw it and counter-offer. Many agents forget to withdraw the offer and just move on…. aka the live hand-grenade. No form is needed-just a phone call,e-mail, text or even better- all three.  Just like David Davis and TAR Staff said- Communicate!

Kathy MOORE Cloud on 02/09/2017

WARD/BRIAN
  I would like to hear more about the #1. Seller rejects offer     portion of the Seller’s invitation to re-submit form.    I’ve been told….and it makes sense to me….that since this form states the offer was rejected, that the form should be used in communicating PURE REJECTION as well (not inviting any changes to the offer as in #2 of the form).  How did that form come about?

  It was my understanding that the form gave the sellerthe opportunity to reject and communicate what they would like to see in an offer…  WITHOUT actually accepting the offer which would allow the seller to consider Other offers in the interim.

David Davis on 02/09/2017

The simplest way to put this is to look at the way the TAR Editorial Staff explained it in the beginning.

It appears that everyone is looking for a form that becomes binding upon the parties and or the licensees.  You are not going to get a “Form” that does that.  It’s physically impossible!  No contract exists, so nothing is binding.

TREC only promulgates forms that are addenda or amendments to contracts.  Anything else would be the practice of law.  If TREC doesn’t promulgate (approve) it, there is very little chance that TAR is is going to approve or publish it.  I find it very unlikely that TAR is going to bite the hand of TREC and publishing such a form as this would be biting the hand of TREC after they (TREC) refuse to promulgate it.

To get a form (addenda or amendment) would require the existence of a contract. Since there is no contract in existence in this scenario there is no form to create.

As for the MLS that “created a form,” that form is not binding upon anyone.  It serves no purpose of any kind other that communication just the same as the Editorial Staff mentioned in it’s opening remarks.  Go back to what the TAR Editorial Staff told you and communicate your principal’s instructions and MOVE ON!

Holly Barnes on 02/09/2017

Kathy,
Im going to bed…wow Im am thinking about one thing and typing another. I appreciate the feedback.

Brian Cooper on 02/09/2017

Thanks Kathy- The Seller’s Invitation To Buyer To Submit New Offer form from TAR does not carry the same legal capacity that a withdrawal form would. That form is considered a communication and “invitation” . It is strictly
an information form only. There would be a big difference between the two forms.

Kathy MOORE Cloud on 02/09/2017

Holly,
  Honey, get some rest….then come back and take a focused look at the contract….specifically where it addresses earnest money.  Then go to your Broker for clarification or the legal hotline.    I am glad you take an interest in TAR’s forums.    I’m an old crone…been around a while…worked through a lot of transactions but I sure don’t know it all.  I love to dial in when I have some time ...hear the views and it gives me food for thought and also tends to make me actually go to the FORMS themselves and do a few “what if’s”......and refresh my memory of the latest changes also.  NEVER HURTS to just sit down with a contract and READ IT all the way through.  We can easily get into a bad habit of “filling in the blanks” and not paying attention to the legalese and intent….or believing some squirrel in the office.      Best Wishes.

David Davis on 02/09/2017

No there is no blank to insert anything as far as time on the initial deposit of earnest money on the 1-4 or condo contract.  That blank you speak of is for additional deposits or on commercial contracts only.

Earnest money is to be deposited “UPON EXECUTION”  I’m not scolding anyone. I merely pointing out what the contract states, but I will add that it appears that “scolding” as you put it might not be such a bad idea if that is what it takes to get your attention to do your job.  My next question is WHERE IS YOUR BROKER when you are making these mistakes?  (S)he is the one that will ultimately have to pay the price for them!

And you want to talk about adding a form (one that I’ve already told you would be practicing law) to try to handle, when you are struggling with the existing forms?

Holly Barnes on 02/09/2017

Hey David,
I’ve read it and there is a blank to put in what you want but I always put 48 hours as I prep my buyers to be ready.
I can see that you’re very detailed and knowledgeable but maybe lack a bit of finesse.
I believe that its better to teach than scold but thank you for bringing that to my attention anyhow.

David Davis on 02/09/2017

Earnest money is NOT 48 hours.

Have you not read the contract?

Kathy MOORE Cloud on 02/09/2017

Brian,
  Thank you for your clarification and also for your time in serving at TAR.

So, are you saying we’ve done that very thing with the “Seller’s Rejection form”....
  and do realtors say “use the correct form” in order for the SELLER to reject a submitted offer?    Just curious how that form came about.

Holly Barnes on 02/09/2017

Hey Kathy, Sorry… Typo and working on 1 hour of sleep. Earnest Money is 48 hours.
I did mean Earnest Money though but I was really asking if a buyer puts out an offer and the sellers agent doesnt respond and you’ve given your communications then what is there for the buyer to loose. How could they be made to perform…. am I wrong?

David Davis on 02/09/2017

Simply put it’s a disaster waiting to happen.

Brian Cooper on 02/09/2017

David Davis is correct with his statement about TREC . You won’t be seeing this form coming from them, and I hope TAR won’t consider it either.

Kathy MOORE Cloud on 02/09/2017

Gwen…
  Maybe you could forward that withdrawal form on to TAR for their review/consideration.
 
  Withdrawal of an offer should be pretty simple language, right?  Like the seller’s “rejection of offer” sentence.

Brian Cooper on 02/09/2017

Having served on TAR forms committees for many years, I’ll try to give you the best reason this form was never developed. (And try to keep the answer as short as I can). The legal right for a buyer/seller to withdraw an offer or counter offer prior to its acceptance is indisputable. If such a form existed, Realtors who followed the correct way expressed by TAR’s legal staff above would be met with statements requesting the agent use the “proper withdrawal form” before the offer or counter offer could be withdrawn.  Most real estate attorneys don’t want to see this form for fear of misuse. Neither do I. I like good forms, this wouldn’t be one of them!

Kathy MOORE Cloud on 02/09/2017

David d
  Since this is a Texas Association of Realtor (TAR)  forum/blog from their website,  and since ” Ward Lowe, TAR staff”  indicated below that we could request a TAR FORM or change through .(JavaScript must be enabled to view this email address)  I am hopeful.    TREC, not so much.

David Davis on 02/09/2017

Oh no here we go with that 72 hours earnest money thing again.

Who is teaching this GARBAGE?

Kathy MOORE Cloud on 02/09/2017

Hi Holly,
  Do you mean the “option money”? submitted within 72 hours? 
  If there is an “executed contract” then “performance”  of the terms of the contract begins on executed date.  A seller could still pursue legal remedies if the buyer defaults….whether he showed up with the earnest money timely or not.  It would not just be a matter of “not loosing the earnest money because you never brought it in”.  I would want to read the promulgated form closely and make sure my buyer understands the areas where his/her performance is expected in order to avoid lawsuits ...there would be a lot to loose simply in time and effort and frustration.

Gwen Moore on 02/09/2017

Yes, we need a withdrawal form.  Our local MLS has created a withdrawal form that is available via ZipForms, and although not promulgated, it worked well for me yesterday when my seller client decided to withdraw a counteroffer that had not yet been returned by the buyer so that he could entertain a higher offer that was received.

David Davis on 02/09/2017

The very simple reason that you’re not going to see a form is because TREC only promulgates addenda and amendments to CONTRACTS.  Creating a a form for use outside of an actual contract or it addenda would be the practice of law.  Specifically contract law.  You can expect a great big KIBOSH from TREC on that one!

There is no contract as the seller has not yet signed the offer into a contract.  Therefore there is no contract to be be addenda or amended.

But if you want to see (what will be in my opinion) your request die a painful death you can take it to the Broker-Lawyer Committee who holds open meetings and makes the suggestions to TREC for new forms and revisions to existing forms.  You can get the schedule for their meetings on the TREC website.  Again those meetings are open.

Holly Barnes on 02/09/2017

Communication and best efforts are always best, although I understood it that if a buyer hasn’t brought the Earnest money yet then what’s to loose? Can a buyer be forced to perform.  Just as a seller can move on if the buyer fails to bring the earnest money within the 72 hrs.
Am I possibly missing something here?

Charles Webster on 02/09/2017

Being dual state licensed, the other has a section for when the offer was cancelled and listed as time is of the essence

Kathy MOORE Cloud on 02/09/2017

Promulgated Forms tend to carry more weight with all parties to a contract and the client’s acknowledging signature removes any potential doubt of their intent/directive.  Same as a form for a seller to sign “I reject your offer” would provide verification that the seller was in fact aware of every offer.  Buyer doubt creeps in when told that multiple offers existed and verbally told that their offer was rejected, for instance.  YES…. I also understand “just how many forms do we need, anyway?”

Michael Lambert on 02/09/2017

Keep it it simple a quick phone call and email is great, why wait for a signature from the other side on a contract then have to wait for that confirmation. Agent To Agent confirmation with an unsigned, unbinding contract is an agent to agent relationship Agreement in this case.

Sherri Barrett on 02/09/2017

I totally agree.  I was just asking this very question a couple of weeks ago.  Seems like a simple form to me.

david on 02/09/2017

the theme here is when the sellers agent or the seller HAVE NOT gotten back to the buyer & the buyer has decided to withdraw the offer , no matter if there is a form are not , if the sell side is not responding , therefore documents IE email & a certified over night letter return receipt requested along with a phone call even if it is left on VM you have shown “Best effort”  in making contact issuing the with draw notice.  Having a form for this will not change the response from sell side.  using both could help simply the form being confirmation by sell side

Susan Horton on 02/08/2017

Thank you for the quick response.
Susan

Ward Lowe on 02/08/2017

Susan: To request a new TAR form or changes to an existing TAR form, please email .(JavaScript must be enabled to view this email address). All submissions are logged and reviewed.
-Ward Lowe, TAR staff

Susan horton on 02/08/2017

I agree… we need a form.  It is too easy to blame internet for non-receipt.  I have sold a property twice because of this very thing and the legal cost to fight it were not cheap.  What is the process for requesting this form be created?
Susan

Kimi Bruno on 02/03/2017

I have never understood why there is not a form for this that the buyer must sign that we can submit to the other agent.

Mary Ann Jeffers on 02/03/2017

The key word here is documentation, make sure all communication is noted in file including text messages and emails.


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