Fact Pattern: You are the buyer’s agent. Your buyer submitted an offer using C.A.R.’s Residential Purchase Agreement (RPA). The seller responded with a Seller Counter Offer (SCO #1). The buyer responded to the seller with a Buyer Counter Offer #1 (BCO #1). Right after submitting the BCO #1, the buyer has a change of heart, and just wants to go back and accept the seller’s SCO #1 after all. SCO #1 has not yet expired.

Multiple Choice Question: Can your buyer submit to the seller a Withdrawal of Offer (WOO) for BCO #1, along with the buyer’s signature on SCO #1? Pick the best answer:

A. Yes.
B. Yes, but there’s no valid, binding contract unless the seller signs again.
C. No, the buyer must submit a WOO and a new BCO #1A restating the terms in SCO #1, in hopes that the seller will accept.
D. No, the buyer must submit a new offer in hopes that the seller will accept.

Answer: Answer A is not the best answer. The BCO #1 that the buyer had already signed and submitted specifically stated right above the buyer’s signature line as follows: “By making this counter offer, any previous offer or counter offer can no longer be accepted.” That particular provision is a restatement of the legal definition of a “counter offer.” In contract law, a “counter offer” is defined as a rejection of the prior offer and the submission of a new offer. Once the buyer has rejected the seller’s prior offer (SCO #1), going back to accept it will not create a valid, binding contract.

Answer B is the best answer. The buyer can submit a WOO for BCO #1 along with the buyer’s signature on the prior SCO #1. However, there’s no valid, binding contract unless the seller signs again.

Of course, if the seller has already signed in paragraph 4 of SCO #1, and the buyer has already signed in paragraph 5 of SCO #1, there’s no more boilerplate signature lines for the seller to sign yet again (unlike the SMCO). But in the blank space below paragraph 5, the seller can clearly indicate that the seller is accepting, along with the seller’s signature and date. Doing that should demonstrate a meeting of the minds, and create a valid, binding contract. That said, as the buyer’s agent, you should check to see if the seller’s side will be willing to do that.

Answer C is not the best answer. It’s true that submitting a WOO and a new BCO, as described in Answer C, is the cleanest way to do the paperwork for this situation. If the seller signs the new BCO, the parties have a valid contract.

But Answer C is not the best answer because of the word “must.” There are many ways that the parties can enter into a valid agreement. Some ways are more likely to pass legal scrutiny than others. But Answer C is not the only way. It’s just the cleanest way.

Answer D is wrong, but an excellent practice tip to remember. Sometimes there are so many counter offers, text overflow addendums, withdrawals, and other documents floating around, that starting all over again from scratch may be a good way for a buyer to get the seller into contract.

Copyright© 2024 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 May 20, 2024. 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. Written by Stella Ling, Esq.