What is the best way to withdraw an offer?

QUESTION: My client made an offer yesterday afternoon. After sleeping on it, he has changed his mind about buying the property. He is now really concerned that the seller will accept his offer and he has asked me to move quickly to withdraw the offer before that happens. Is there a standard form for withdrawing an offer? If not, what is the best way for me to withdraw an offer?

ANSWER: There is no standard form for a party to withdraw an offer or a counter-offer. A withdrawal may be communicated by any usual means of communication, including a phone call, a text message or an email. To be effective, however, it is crucial that a withdrawal (also called a revocation) be communicated to the party who received the offer (called the offeree) before the offer is accepted. A 1985 decision by the Supreme Court of North Carolina (Normile v. Miller) held that communication to the offeree of “notice of an offeror’s revocation” effectively terminates the offeree’s power to accept the offer. As long as the withdrawal has been authorized by the offeror, it may be communicated by the offeror’s agent. And pursuant to paragraph 20 of Form 2-T, a notice of withdrawal may be given either to the offeree or the offeree’s agent.

What is the best way to communicate notice that a buyer’s offer is being withdrawn? We have several suggestions.

The first and most important piece of advice is to act quickly. Upon receiving a request from a buyer client that a pending offer be withdrawn, a buyer’s agent needs to give notice of that withdrawal to the listing agent as quickly as possible so that the offer is not accepted in the interim. Ideally, the first notice of withdrawal should be in writing. If there is a dispute later on, it will be helpful to have documentation of exactly when your notice of withdrawal was communicated. As noted above, the writing can take the form of an email or a text message. If, for some reason, you are unable to immediately deliver any sort of written notice to the listing agent, you should go ahead and give verbal notice, presumably by telephone, right away. As soon thereafter as possible, send an email or text message to the listing agent confirming the timing of your verbal notice. One potential risk of using the telephone to communicate a withdrawal: the other agent might blurt out an acceptance before your notice of withdrawal is communicated!

A second piece of advice is to ask your client to confirm in writing their request for withdrawal of their offer. Again, this writing can be in any form; an email or a text message from the client to you would be sufficient. Once received, this writing will confirm that you were expressly authorized to communicate the withdrawal of your client’s offer. While obtaining this written confirmation is strongly recommended, you should not wait for it before communicating your notice of withdrawal to the listing agent – as noted above, that notice needs to communicated right away!

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Filed Under: Contract Law,