After successfully completing this topic, you will be able to list the different ways to terminate an offer.
Parties to an Offer
An offer is made by the offeror; it is received by the offeree. If the offeree does not agree to the terms of the offer, the person may make a counteroffer. In effect, the original offeree has made a new offer and becomes the offeror. The original offer is void.
The buyer may withdraw the offer at any time before the seller accepts it and communicates the acceptance to the buyer. The buyer legally controls the deposit, and may request it back until the offer is accepted and communicated. When the offer is accepted and becomes a contract, both the buyer and the seller control the deposit.
There is no legal requirement for a seller to accept an offer, even a full‑price offer, if the seller is not violating fair housing laws. The seller may, however, be liable for a commission.
An offer can be terminated by
• withdrawal by offeror,
• lapse of time,
• death, or
• destruction of the property.
Note—The first five items are related to the handling of the offer. The last three by misfortunes beyond the control of the parties.
Some events would terminate the offer:
• The building could be destroyed by fire, terminating the offer.
• One of the parties could become incompetent by insanity, terminating the offer.
• One of the parties could die, terminating the offer.
|Example: A broker showed a buyer a home listed at $225,000. The buyer made an offer for $210,000 and sets a deadline for acceptance of Tuesday at 11 pm. The buyer is the offeror, the seller is the offeree. |
The seller has three options:
1. accept the offer—this will terminate the offer and create a contract.
2. reject the offer—this will terminate the offer.
3. make a counteroffer—this will terminate the offer.
The buyer may withdraw the offer anytime up until the offer is accepted by the seller. This will terminate the offer. If the seller has not accepted the contract by Tuesday at 11:01 pm, the offer will be terminated by lapse of time.