June 3rd, 2019 at 2:11 pm
I am the listing agent for a pending sales transaction. The buyer, Ben, has a sale contingency. My seller has just received a good backup offer. The seller wants to try to cancel the contract with Ben under paragraph 8 of the C.A.R. Contingency for Sale of Buyer’s Property (COP).
Multiple Choice Question: What should the seller do before cancelling? Pick ALL of the correct answers from the following list:
A. Accept the backup buyer’s offer in writing (using the C.A.R. Backup Offer Addendum).
B. Give a copy of the backup offer to Ben.
C. Give Ben a 3-day notice to remove his loan contingency.
D. Give Ben a 3-day notice to remove his sale contingency.
E. Give Ben a 3-day notice to provide verification of sufficient funds to close escrow without selling his existing home.
Answer: All of the above answers are correct. To cancel under paragraph 8 of the COP, the seller must not only accept a backup buyer’s offer, but also give a copy of that accepted backup offer to Ben. The seller must also give Ben a 3-day notice to remove the loan contingency and sale contingency, as well as show proof of sufficient funds to close escrow without selling Ben’s existing home (paragraph 8A of the COP). As a practice tip, instead of using a 2-day Notice to Buyer to Perform, the seller can complete the bottom section of the COP and deliver it as a 3-day notice to Ben.
-Thank you to Chris Fryson (San Diego Central and La Mesa/El Cajon Manager) for suggesting this week’s legal tip.
Copyright© 2019 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of June 3, 2019. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.
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