Can a seller retract acceptance of an offer if all buyers have not yet signed the contract?
QUESTION: I am a listing agent. A local agent recently sent me an offer to purchase on Standard Form 2-T that listed three individuals as “Buyer” in paragraph 1(b). Only one of those individuals had actually signed the offer. I sent the offer to my client. The price and other terms were acceptable so my client signed the offer and asked me to send it to the buyers’ agent. Although I have repeatedly asked that agent to send me an offer signed by all three buyers, I have yet to receive one. My client is not willing to enter into a contract with only the one buyer who has already signed. Can my seller client retract his acceptance or is it too late?
ANSWER: It is not too late. Although a seller’s right to terminate a standard form contract is fairly limited once the contract is effective, the failure of all the buyers to sign the offer means that the “contract” your seller signed has not yet become effective.
Paragraph 1(g) of Form 2-T defines the “Effective Date” of the contract to be the date that the last one of Buyer and Seller has signed or initialed the offer or the final counteroffer and such signing or initialing has been communicated to the other side. Since the buyers’ offer defined “Buyer” to include three individuals, all three individuals must sign the offer. The signing must then be communicated to the seller before the contract is effective. If those two things have not happened, no contract has been formed. Your seller has every right to notify the buyers that he is withdrawing or retracting his “acceptance” of their incomplete offer.
To avoid a similar fate, buyer agents should make sure that the buyers identified in paragraph 1(b) have all signed the offer before that offer is delivered to the listing agent.
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