As you know, in our improved market where with low inventory, it is not unusual to see multiple offers on a well priced property. In that context, we are seeing many situations where our listing agent and seller are being forced to decide whether to rescind a previously issued counter offer. For example, last week we had a deal where, on the first day the property was in the MLS, we received an offer that our seller wanted to counter. Once that counter was sent to the buyer, however, a second offer came in. The question then became how to handle this situation in a way to both protect the seller legally and keep buyer no. 1 interested in the property. After all, once we issued the original counter offer to buyer no. 1, they now had control of the transaction. They could create a contract merely by accepting and delivering the counter back to the seller. So, we wanted to change that situation, and give the seller control of the process, while keeping the buyer interested.
In these cases, unfortunately, the first thing you have to do is protect your seller legally. As a result, you need to create a writing, by e-mail or otherwise, informing the buyer that the counter offer is being rescinded. Once you send that rescission, the buyer no longer has the ability to create a contract because he has no viable offer in his possession. Remember that any offer can be rescinded until it is accepted and delivered back. It does not matter how long the buyer has had it or how long the document says it will remain open. Any offer can be rescinded until acceptance. So, rescind IN WRITING. If you don’t, and instead call the buyer’s agent, they will have their client sign and return the counter. And then, of course, you will have the fight of which occurred first, your phone call or the acceptance. So, avoid the problem and rescind in writing. (Your e-mail should say something like this: “Counter Offer No. 1 regarding [property address], made by seller to buyer on [date], is hereby rescinded. Multiple counter offers will be issued by seller to buyer shortly.” )
After your e-mail is sent, however, you should return to salesperson mode. Call the selling agent, tell them that the rescission is in the e-mail, but that multiple counter offers are also on their way because a new offer was received. This phone call will soften the blow of the rescission and explain why it was done. It will assure buyer no. 1 that you are still interested in them and want them to continue their efforts to buy the property. The phone call is just a nice personal touch at a time when you are forced to do something some may see as a little too “legal.”
So do both. Rescind in writing first and then call to explain. That way you protect your seller and allow them to take advantage of the multiple offer situation while assuring all buyers that they are still strongly being considered for the property. And, as importantly, you ensure that the property is not being sold twice. And that is always a good thing.
As always, give us a call if you have any questions.
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