Missing a Deadline to Counter

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One of the best ways I have of telling how good a listing agent is is whether they get the counter to me before the offer has expired. Not that someone who gets the counter back to me quickly is necessarily wonder-agent, but that someone who doesn't sure isn't.



The whole idea of the purchase contract is that it becomes a legally enforceable contract when accepted. But if you're missing the "little detail" of timeliness, the contract hasn't been accepted, indeed it becomes impossible for it to be accepted unless someone is capable of time travel.



Missing offer deadlines has become common of late, with sellers hoping for better offers, so they sit on this one until too much time has passed, thus hurting their case further.



The other side missing the detail of timeliness gives my clients power. Now my clients can choose to accept what has become a counter-offer rather than an acceptance, because even if the other side intended to give a full acceptance, they haven't. There's this not so little niggling detail of the fact that the original offer has expired. It's dead. It's an ex-offer.



The other side missing deadline gives me information. After the deadline, I'm pretty certain there aren't any other offers going on, no matter what the other agent says. If there are other offers, they're not good offers. If there were other good offers, better than mine, why are they countering me so late? When I have multiple offers on one of my listings, I get each counter out there as quick as I can, and the proviso that another offer is not previously accepted is on every single one of them.



This means that my client is in a stronger position than they were in initially. Not infinitely stronger, but noticeably stronger. Particularly in the buyer's market we have locally and in most of the rest of the country. Even in a seller's market, it tells me that no one else wants this property at that price. It may be grounds to counter even lower.



This means that an agent who sits on an offer (or counter-offer) is weakening their clients bargaining position, i.e. violation of fiduciary duty. Unless it's the client who just can't respond, that agent has now incurred the possibility of action. Even if the client has been told of the offer, I always feel that I need to tell them that most offers have expirations, and the sooner they counter, the stronger their perceived bargaining position.



It's no better for a prospective buyer to miss a counter than it is for a prospective seller. There must have been something about that property that was attractive to you. Properties for sale never last longer than the first person who does what is necessary to get the seller to agree to terms. Once it's in escrow with someone else, it's too late to decide you want it. Unless it falls out of escrow - something not under your control - you are out of luck. Being a back up offer is most often a sucker's proposition.



This doesn't mean I make a habit of demanding responses within 24 hours. That's overplaying your hand in most situations. But a deadline of three to four business days is quite reasonable, and situations where it may be to your advantage to delay are rare. If you can't respond to an offer or counter-offer in that amount of time, something is wrong.



Caveat Emptor

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This page contains a single entry by Dan Melson published on July 1, 2007 10:02 AM.

Leverage - Making a Decent Investment Spectacular was the previous entry in this blog.

Real Estate is More Local Than Most People Think is the next entry in this blog.

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