My clients told me about the home they wanted to buy before it was listed for sale. A friend of theirs knew the owners who needed to sell and relocate out of the area. When I received the information, I called the owners to inquire if they were indeed planning on selling and needed an agent to help with the process. It was then that the owners informed me that they were signing the listing papers the next day with their agent but I could show the home that same day.
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Although I had missed out on a listing that I already had buyers for, I felt I was in a pretty good position to write a purchase contract and get it accepted before anyone else knew the home was for sale. I felt fortunate because other homes in the same price range, location and size were selling within days. My clients had already missed out on two other homes and they were beginning to get discouraged.
The listing agent was understanding when I explained the situation. She had planned on entering the listing into the MLS system by Friday and, yes, I could show the home before it went public on Thursday. I felt a little smug knowing I would have an offer in hand before the house was actually on the market. It was all a little too easy.
The home suited my clients perfectly and after they signed a full-price purchase contract I hand delivered it to the listing agent Thursday evening on my way home. The agent would likely meet with her sellers on Friday and I would have an accepted contract by the end of the day. Friday passed without a phone call or e-mail from the listing agent and by Saturday morning when my calls and e-mails were not returned, I was beginning to get suspicious that something was amiss. Then the phone call came.
“Sorry Ken, I don’t have an acceptance for you yet. The sellers decided to take off for the weekend but your offer is fine and I should have it signed by Sunday.”
The standard purchase contract has a defaulted expiration date that reads: “This offer shall be deemed revoked and the deposit shall be returned unless the offer is signed by seller and a copy of the signed offer is personally received by buyer, by 5 p.m. on the third day after the offer is signed by buyer.” The buyers had signed the contract Thursday afternoon, making it likely that the contract would be expired before it was presented.
Law and ethics require that the listing agent present any and all offers within a reasonable period of time. Offers can be presented verbally, in person or in a digital format. Regardless of when the offer is presented, the buyer’s offer is considered expired unless the seller accepts the offer and it is delivered back to the buyers or their agent.
It’s not unusual for the time of the seller’s acceptance to go past the three days. Obtaining a seller’s acceptance on an REO can take a week. Most buyers making an offer are not aware or concerned with the three-day expiration; they just want their offer accepted. I wasn’t concerned about the contract expiring. I was concerned about the number of potential buyers previewing the home. After all, until the purchase contract was signed by the seller the home was actively on the market.
The same neighbor, who had told my clients about the home being for sale, called them every time the house was shown over the weekend. After each call my clients called me. They were frustrated. They had written a full-price offer on Thursday that the sellers would not accept until it was expired on Sunday, at which time there would likely be more offers.
Once a buyer’s offer is submitted to the seller’s agent, the agent and the seller control the situation. Sellers need not accept a full-price or better offer, they are not required to make a counter offer or they may make counter offers to every offer submitted. Buyers simply wait upon the seller’s response.
The e-mail arrived Monday morning with attached instructions that there were multiple offers and that the buyers were to submit their “highest and best” offers for the sellers consideration.
“How can the sellers counter our full-price offer?” My clients asked. “We refuse to pay over the listing price.”
What once appeared to be a slam dunk was unraveling. I was losing this deal unless I could come up with an advantage. It was then I thought of the friendly neighbor.
As the agent representing the buyers, ethics limit my negotiating directly with the sellers but I could visit with the friendly next-door neighbor. I explained the situation. His friends and my clients wanted to buy the house; there were other offers; my clients could not go higher than the listing price and was their anything I was missing to help put this together? There was. The neighbor told me the sellers had a lifetime accumulation of stuff in the barn and they were worried they could not move everything prior to their move date. Perhaps, if my client’s allowed the sellers additional time to remove their belongings ….
Our new offer was accepted the same day it was written. It provided for the sellers to have up to four months to relocate their contents of the barn. It was the friendly neighbor who helped me understand that the security of the seller’s personal treasures was more important than a higher price.
Ken Calhoon is a real estate broker in El Dorado County. He can be reached through his website at kencalhoon.com.