You’ve searched for a house, you found it, and you wrote an offer. What’s next?
The Seller has three options. 1) Accept your offer, 2) counter your offer, and 3) not even respond. Although it’s arguably poor judgment and taste, the Seller is not legally required to respond to an offer even while the house is still for sale.
In the November 2023 issue of Michigan Realtor®, the legal team provided some examples of complaints they heard and the findings. This one is a bit more common than I’d like it to be.
Question: A buyer’s agent submitted an offer, the sellers countered, and the buyers accepted the sellers’ counteroffer. The buyers’ acceptance was sent to the listing agent who notified the sellers via telephone. The sellers then received a better offer from another buyer. Are they bound by the first purchase agreement? They have not bottom-lined the first contract and, in fact, have never received an actual copy of the accepted counteroffer.
Answer: Yes, the sellers are bound by the first purchase agreement. Delivery of the buyers’ acceptance to the listing agent is effective delivery to the sellers. The first purchase agreement would be binding even if the listing agent had not called the sellers to let them know they had received the signed acceptance. Bottomline signatures are not required for there to be a binding agreement.
The above Q&A involved a couple terms that may not be completely understood by non-agents. Bottomline is a term meaning an additional signature, often the bottom of an agreement, that legally binds the document. Bottomline signatures are needed for any changes made to the initial offer such as price, length of time allowed for due diligence, and any other change. Most follow an acceptable belief to initial changes and bottomline the purchase agreement. It is also necessary for a buyer to bottomline after a seller signs the agreement but only after their expiration. For example, our offer is valid until 5pm 11/20/23. If the seller signed at 5:01pm or after, the buyer (not seller) must bottomline the PA. It should be noted once the PA is finalized, any additional changes are done through an addendum. Sellers do not have to bottomline documents as they receive the document after a buyer presents them. As such, changes may be made and verbalized to the buyer, but the buyer must sign any changes as verbal agreements are not considered binding in a real estate transaction.
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