Definition of “revocation”: The official cancellation of a decree, decision, or promise.
What does it mean when someone revokes an offer? I can tell you that you do not want to find out the hard way!
Simply put: If your buyer revokes an offer; they have cancelled the contract that they had sent to you, signed and agreed on. Until you have signed back, texted or emailed that you have accepted the offer, your 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
Your listing has an offer come in on it at $800,000 (offer #1). You and your REALTOR® counter that offer to the buyer at $810,000. This is a signed counter-offer from you, the seller.
Next thing you know, another agent sends an offer at $830,000 (offer #2). Obviously as the seller you want offer #2. If offer #1 has not responded to your 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 need to email, text and then call that you are officially revoking your counter-offer. This officially cancels your counter offer to offer #1. That agent (let’s call them “the revoked”) will 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 your seller and their money is the more important of course.
You can still look at both offers at this point and deal with it as you please. Typically offer #1 will be upset and not want to offer again. The good news is that offer #2 is ready to go.
Why do I know this? Because it happened to me as an agent, and it was not pretty! I have had the “pleasure” of doing this on behalf of my sellers when there was an opportunity to get a better offer and, although I do not enjoy the conversation, the goal is to get my seller the best contract. And if revoking the offer is the way to do so, then it must be done.
The last time I had to revoke a counter, my seller earned an additional $18,000 on the sale price. Nothing major changed in my fee on a percentage basis but my seller was to the moon! The agent who I revoked the offer from was none too happy but they learned the hard way that they should have signed the contract fast – and they learned a new word that day.
Lessons in Real Estate and Offers
What has all this taught us? As a buyer, if you are going to accept a counter offer, do it fast. 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 Realtor cannot use an online signing system, you may want to send them links to Docusign or Authentisign ahead of any such circumstances. In this market of multiple offers, things change quickly.
On the flip side, if you are a buyer and you have sent a subject-free offer to the seller and you get cold feet, you can also revoke your offer. This happens much more rarely but it does happen. Besides, if you have subjects on your offer you can walk away from it at any time during the subject removal process. You may as well lock it up so nobody can take it away from you, without you making the call.
Most importantly, before you decide to revoke an offer or counter-offer, a quick phone call to your lawyer is always a good idea!
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