What is 'Revocation of Offer' in Real Estate?
There are so many terms involved in real estate that it can leave buyers and sellers feeling like they need to learn a new language. While some terms are well-known and obvious, others are rather obscure and foreign. And one of those terms is 'revocation of offer'.
What exactly does this term mean in real estate? And will you ever be in a position to exercise this process?
What Does 'Revocation of Offer' Mean?
Simply put, revocation of offer means withdrawing an offer before the contract is considered legally binding. In other words, the offer is revoked before the other party accepts it. Once the accepting party has been formally told that the offer has been withdrawn before offer acceptance, neither party is legally bound to the contract.
For example, let's say you're a buyer and have made an offer on a home. But for some reason, you've had a change of heart. In this case, you can revoke your offer if the seller has not yet accepted your offer. As such, you have no legal requirement to adhere to the purchase and sale agreement.
On the other side of the coin, you may be the seller who has received an offer on your home, but you then counter the offer. In this case, you as the seller can revoke your counter-offer if the buyer has not yet accepted it.
As such, each offer and counter-offer may be revoked.
An offer may also be considered revoked if it is rejected. For example, if your offer as a buyer is rejected by the seller, it is considered revoked.
It's important to understand that you can only revoke your offer if the other party has not yet accepted it. Once the other party accepts your offer, you can no longer revoke it. After offer acceptance, you will be legally bound to the contract.
Clear Communication of Revocation is Required
It is essential that a revoked offer is clearly communicated to the other party. Failure to clearly communicate the offer revocation can have negative consequences for the party wishing to withdraw the offer.
Communication plays an equally important role in offer acceptance, too. In order for an offer to be valid, the offer must be clearly communicated to the other party, and acceptance of the offer must also be communicated. If the offer is not accepted, it is invalidated and may be revoked.
Revocation of offer can be complicated. The best way to avoid any issues is to avoid making an offer that will eventually be revoked. That's why it's essential that you work with an experienced real estate team that will help you make a sound decision before making an offer on a home. Ideally, you should be 100% positive and confident about your decision to make an offer, and a seasoned real estate team can help ensure that.
Whether you're on the buying or selling end of a real estate deal, we'd love to help. Reach out to The Lotus Group today!