4 Ways an Offer To Purchase Can Lapse
The most exciting step that you take during the home hunting
process is putting in an offer on a house that you really want.
Buyers are always eager to know whether or not their offer to
purchase has been accepted!
This can determine whether their search is over or whether they
will have to don their hunting gear one more time. Being in this
state of limbo can be very frustrating and questions to tend to
pop up – one of them being how long does an offer remain valid
before it lapses?
There are four different scenarios where an offer could lapse:
#1 – Lapse in time:
On a standard Offer to Purchase document, there is usually a blank
section left open where the potential buyer can state how long he
is willing to leave the offer on the table for.
The seller will then have until that specified date to accept the
offer that the buyer has presented. If the seller does not accept
on or before the date specified by the potential buyer, then the
offer will lapse and fall away completely.
There have been instances where no date has been specified on the
Offer to Purchase document. This does not mean that the offer is
valid for an infinite amount of time.
In these cases, the offer will usually stand for a ‘reasonable
amount of time’ before it lapses.
#2 – The seller rejects the offer:
The offer ceases to exist immediately if the seller rejects it.
In this case, the seller will not be able to go back on their
decision and accept the offer once they have rejected it.
If the seller counters the buyer’s offer, it is considered a
rejection of the buyer’s original offer. A counteroffer occurs
when the seller crosses out the buyer’s amount and increases it
with his or her initials added onto it.
If the buyer decides that the amount is too high and does not
accept the counteroffer, the offer will lapse. The seller will
then not be able to accept the buyer’s previous offer and a new
agreement will be drawn up.
#3 – The offer is revoked:
Once a buyer makes an offer and it is added on to the Offer to
Purchase document, it becomes a legally binding sales agreement
as soon as the seller signs it.
However, before the seller accepts the offer, it can be revoked
by the buyer. This can only happen if it has not been stated that
the offer is irrevocable for a certain period of time. It must also
be brought to the attention of the seller within a specific time
frame.
To avoid any altercations, it is best to know exactly how much you
are willing to offer on a house.
#4 – Death of either party
If the buyer or the seller dies before an offer has been accepted,
the offer to purchase will automatically lapse. A new offer will
have to be made with the new party responsible for the selling of
the house.
Before putting in an offer to purchase ensure that you know the
legalities that come with it and that you know what you are paying
for.
Source: Immoafrica
07 Sep 2018
Author Veda Palmer