Conditions of Acceptance – The Promise to Purchase Deadline
When you’re ready to make an offer on a property, your real estate broker will help you fill in a Promise to Purchase to present to the seller. In this document, you specify the price you want to pay, any applicable conditions and the deadline for responding.
Until this deadline passes, you are legally bound to the price and conditions you presented. If the seller finds your price and conditions satisfactory and signs the Promise to Purchase, then both parties are legally bound to its terms.
Should the seller decide to write you a counter offer, they can do so at any time. They aren’t bound to the deadline indicated in your Promise to Purchase (Clause 14.1). They can, in fact, write a counter offer hours or even days after your deadline if they choose to. However, in their Counter Proposal to your Promise to Purchase, they must indicate their own deadline, during which time they are legally bound to the conditions they have presented. They cannot sell the house to someone else in that time frame. You now have the decision to accept within their deadline, walk away, or write a counter offer and set a new deadline for yourself.
A counter proposal is the equivalent to a new offer: the seller submits the counter stating he agrees with everything in the Promise to Purchase except what he puts in the counter. If you reply with a counter offer, the sellers are no longer bound to their counter and can sell the house to another person if they receive a better offer than your counter offer.
In the spirit of fair negotiation, brokers encourage sellers to counter within a respectful time limit of the buyers’ deadline, so no one is left wondering.
In the case of a Promise to Purchase where the deadline has passed and the seller decides that they want to accept it as is, even though it is technically no longer binding to the buyer, they can do so. However, the buyer then gets to choose whether they still want to respect their original offer or walk away. If they want to accept it, they will sign the acknowledgment of receipt. Otherwise they can refuse to sign, thereby rendering the offer null and void.
This same principal works in a counter offer as well, for the Counter-Proposer and the Respondent, seller or buyer, depending on who wrote the counter offer.
The deadline binds the party writing the offer or counter, not the person receiving it. This is very important to remember if you are in a multiple offer situation where deadlines can mean the difference between being sold or not.
**The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.**