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September 26, 2012

6

Deal or No Deal. Working With an Irrevocable Deadline

by mark mclean

Just when you are struggling for a topic for your blog, bam, one falls into your lap. Whew. That was close. Here is the story. Last week  agent Jones receives an offer on one of her new listings from Agent Lee. It is a good starting point and the Sellers decide to sign it back, giving an irrevocable time of 6pm the following day.  At noon the next day Jones gets an inquiry from another agent, Agent Smith, on the property and lets Smith know it is currently in sign back until 6pm. Agent Jones calls Agent Lee to get an update on the status of the sign back and lets him know that there have been a number of inquiries about the property including one very serious agent. Agent Lee says he is working on it and will let Jones know shortly where his clients stand. Over six hours pass, then at 5:30 pm Agent Lee texts Jones to let her know that he will be sending along an accepted offer in the next 15 to 20 minutes.  At 6:10pm Lee sends the accepted offer to Jones however, by that time, the irrevocable time has passed even though Lee’s clients signed it at 5:30pm.

So the question is…deal or no deal? Agent Lee is arguing that if the Buyers signed it at 5:30 then there is a legally binding agreement therefore it is a deal. However, Jones argument is that in real estate there are two parts to accepting an offer. One is signing the offer within the specified irrevocable time and the other is communicating that acceptance. (Actually there is a third part; acknowledging the receipt of that acceptance).  In this situation, Lee did not get the accepted agreement to the sellers or Agent Jones on time.  In defending himself, Lee said that technical difficulties caused the offer to be delivered late.

With a dead deal from Lee, the Sellers were free to accept an offer from Agent Smith. The story puts the importance of the irrevocable time in a clear light. If it says 6pm it means 6pm. Not 6:05 or 6:10. Lee might argue that he was only a little late. That’s like being a little pregnant. Technical difficulties don’t mean anything today. Fax or scanner doesn’t work? Take a picture with your phone and email or text it.

Have you had a similar situation? Can you relate? How do you prepare your clients? I would love to hear your stories.

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6 Comments Post a comment
  1. Sep 27 2012

    Although not an ideal situation for the 1st offering party, the law is the law. Clearly Agent #1 didn’t keep the lines of communication open and failed to secure the property for his clients. Good for Agent #2 for sticking with it and getting in there.

    Reply
    • Sep 27 2012

      One of the biggest problems with the first agent was that he dragged his feet. Had he just worked faster he would have had a deal. Lazy

      Reply
  2. I find that most of the other realtors I’ve been dealing with do not concern themselves with meeting the irrevocable. By most, I mean I’ve had very few come through on time. Just this morning I got a sign back at 9am that was dated irrevocable for 7pm last night. I admit, it really drives me crazy…but if I don’t want to kill the deal, what can be done?

    Reply
    • Nov 13 2012

      Scare the living crap out of them by saying “oh sorry I just sold it to someone else” LOL

      Reply
  3. Jason Shriner
    Dec 19 2012

    I would suggest that you check out the court cases and legal precedents on this matter in your jurisdiction and also let your regulator chime in with an opinion. You’d be surprised what you might discover on this issue. Here in AB, the Act states clearly that a contract must be in writing in its final form to be enforceable but it is ambiguous with regards to what constitutes negotiation. It could be argued, and at least in this jurisdiction there is precedence to back up a case for Agent Lee as having successfully negotiated a valid contract. His practice sucks, that’s for sure, and I think all experienced Realtors have been frustrated by sloppy paperwork, but sometimes the letter of the law bends to the spirit of the law, i.e. what was the intention of Agent Lee and did he successfully communicate that. Agent Jones could find himself in a legal battle on this one. he may win, and it’s likely he would – but what busy agent has time for that?

    Reply
    • Dec 19 2012

      Great comment. Thanks so much for taking the time. I think that ultimately the lesson is folow through and keeping professional.

      Reply

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