Withdrawing an Offer; Canceling a Contract; Earnest Money Release

 

It’ll try to keep this broker moment short.

 

 

Scenario: You represent the Seller and receive an offer from Buyer #1. The offer is very well written and just needs a few minor changes so your Seller sends a counteroffer to the Buyer #1 at 9:00 AM with a deadline of 5:00 PM for Buyer #1 to Accept. Around noon, the Seller receives a second offer that will net $20,000 more to the Seller than the current offer. The Seller wants to proceed with Buyer #2. What can you do?

 

There is a form called Seller’s Notice of Withdrawal of Counteroffer on the MLS. You would quickly have your client sign this document and then would send it over to Buyer #1. Remember, per the REPC section 18, notices (including a contract withdrawal or cancellation) need three things to be official. First, it needs to be in writing. Secondly, it needs to be signed (in this case by the Seller). Finally, it needs to be received by the other party. This form accomplishes those three steps as long as it’s accompanied by a phone call and/or text notifying the other side that the counteroffer has been withdrawn.

 

A few pointers: Do not contact the other agent before you have the withdrawal signed because they would still have a moment in time to send you the acceptance. If it’s me, I’d push send on the email as soon as I’m dialing the other agent. If they don’t pick up I’ll leave them a voicemail and then will text the agent that the counteroffer is withdrawn. 

 

The Buyers Notice of Cancellation of Real Estate Purchase is the form we use to cancel a REPC. A cancellation also needs to be in writing, signed, and received by the other party. This form is very clear, just make sure you select the correct cancellation option. This is a good time to remind you that typically a Seller can’t cancel a contract generally they can only default on a contract.

 

Upon canceling a contract, if the brokerage is holding the Earnest Money then this is the procedure to get the Earnest Money returned.

 

You will email me a copy of the following:

1. The Full REPC with all addenda.

2. A copy of the Earnest Money receipt

3. The Buyers Notice of Cancellation page signed by the client

4. If the cancellation was done on the same day as the deadline then I’ll need an email screenshot of when the cancelation was sent to the Seller.

5. Finally, I need to know whether the check will be picked up in person or should be mailed. If mailed, provide the address in the email.

 

I personally review all of the Earnest Money releases once a day. Do not promise your client that the earnest money will be released by a certain time or day. I will respond to your email when the release has been approved for the MCA to release the earnest money at which point you may notify the client when the funds will be ready.

 

My best,

 

Rich