Yes, you can withdraw an offer on a house at any time before purchase contracts have been signed. However, you should be very careful about signing any sort of offer letter or form because doing so may enable a counter-party to sue you if you back out of an accepted offer.
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It becomes too late to withdraw an offer after you have signed a contract of sale and delivered an earnest money check to the seller’s attorney. The seller could counter-sign the contract at any point and deposit your contract deposit into the seller’s attorney’s escrow account.
Generally speaking, once the seller has counter-signed the contract and returned the fully executed contract to the buyer’s attorney, the listing is considered to be in-contract and binding on all parties.
However, please note that some buyers’ attorneys will try to be clever and include language that says the contract will only be considered to be fully executed and binding once the buyer’s attorney has confirmed in writing receipt of a fully executed contract.
If this type of language is agreed upon, then technically the buyer would be the last to act vs the seller, and the buyer could technically still withdraw an offer by instructing his or her attorney to say that they never received the fully signed contract.
We’ll explain in the following section why this is a bad idea, and why you should never sign anything if you don’t intend to follow through in good faith.
If you signed a submit offer form or letter of intent, then you have put yourself in a precarious situation and may be sued if you don’t follow through. You should immediately protest to the broker that you have been tricked into signing something that wasn’t necessary to be signed.
For example, in New York offers are generally emailed and are completely non-binding. Real estate offers are generally non-binding in NYC, whether they be made verbally or in writing. There is never any need for a buyer or a seller to sign anything when it comes to the offer submission and negotiation process.
However, some brokers do have their own offer submission forms and templates, and you should push back hard should you ever come across such a form that requires your signature.
Ask to speak with their principal broker if the listing agent demands that you sign what should be a completely non-binding offer.
You can even warn them about the unauthorized practice of law in some states like New York.
This is serious because even though offers are generally not binding in most states like New York, whether they be written or verbally made, there is legal precedence where courts ruled that offers were indeed binding when signed and when it included common contract language.
As a result, you should never sign any sort of offer form or letter of intent, especially if you want the ability to withdraw your offer before having signed a formal contract of sale.
Yes, you can re-negotiate an offer instead of withdrawing it if you’re still interested in buying the property, but just on different terms. In fact, it’s quite common for buyers to attempt to negotiate after inspection but before signing a contract.
Often times, buyers will lure a sellers into a false sense of security by getting an attractive offer accepted. Then the buyer will hem and haw and take up as much of the seller’s precious marketing timeline as possible. Then, at the last possible moment, the buyer will attempt to re-negotiate the deal.
The buyer will tell the seller that they’re ready to sign the contract ASAP since they’ve finished all of their due diligence, but just need this one concession from the seller.
The seller will be frustrated at having wasted all of this time with the buyer, and may actually agree to the concession since the buyer is ready to sign.
Sellers can of course counter-act this strategy by continuing to hold open houses and to show their property until contracts have been fully executed.
While it can be tempting to pause showings after you have an accepted offer, it’s critically important not to do so because accepted offers are made of air. The buyer could re-negotiate or withdraw their offer on a house at any time before having signed on the dotted line.
Please see below for a sample offer submission form which has been customized by a hypothetical, although typical agent in NYC. As we’ve discussed, it’s completely uncustomary to ask a buyer to sign anything when they are making an offer. However, some overly zealous and clearly inexperienced listing agents may try to get buyers to sign their offer form in a misguided effort to impress their clients.
If you see something like this, where the agent first of all annoyingly asks you to fill out a custom offer form, and secondly when they ask you to sign it, you should run. And if you really like the property, contact the agent’s manager to inform them that the listing agent is attempting to practice law without being a lawyer. Furthermore, it’s unethical for a buyer’s agent to attempt to bind a buyer to something that is customarily non-binding!
|Date:||Listing Agent:||Buyer’s Agent:|
|Buyer 1:||Buyer 2:|
|Rent||Own||How Long?||Rent||Own||How Long?|
|Hire Date:||Hire Date:|
|Annual Salary:||$||Annual Salary:||$|
|Annual Bonus:||$||Annual Bonus:||$|
|Other Income:||$||Other Income:||$|
|Schedule C income if self-employed:||$||Schedule C income if self-employed:||$|
|Total Income:||$||Total Income:||$ 0|
|Assets||Buyer 1||Buyer 2||Liabilities||Buyer 1||Buyer 2|
|Cash in Banks||$||$||Mortgages on Real Estate||$ 0||$ 0|
|Other liquid assets||$||$||Installment loans (e.g., auto)||$ 0||$ 0|
|Stocks/Bonds||$||$||Other accounts payable||$ 0||$ 0|
|Retirement Accts.||$||$||Credit card balances||$ 0||$ 0|
|Real Estate owned||$||$||Unpaid taxes||$ 0||$ 0|
|Other Assets||$||$||Other debts||$ 0||$ 0|
|Total Assets||$||$||Total Liabilities||$ 0||$ 0|
|Combined Assets||$||Combined Liabilities||$ 0|
|Offer Price:||All Cash||or Financing:||75%||80%||90%||Other:|
|Down Payment:||Anticipated Lender:|
|Loan Pre-Qualified:||Yes||No||Letter Attached:||Yes||No|
|Loan Pre-Approved:||Yes||No||Letter Attached:||Yes||No|
|Have you made offers on other properties? Yes No||Closing Date:|
|Signatures of Buyers:|
Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Hauseit LLC is a Licensed Real Estate Broker, licensed to do business in New York under license number 10991232340. Principal Office: 244 Fifth Avenue, Suite 2950, New York, NY 10001.