Withdrawing An Offer Explained

Forget Angry Birds. More like Angry Noles. My daughter Jade is really mad. As a matter of fact everyone in Tallahassee, graduates of FSU, and their parents are angry. Jade’s friend couldn’t even meet her for lunch because the friend was both hungover and angry. Not a good combination.

In perhaps the dumbest lawsuit but most shrewd political move of all time, the Governor set aside $1million to sue college football for not being chosen in the College Football playoffs. The big hoopla is because FSU was not chosen for this playoff despite being undefeated. Now, one of the criteria is if your team has injuries…and boy do we Noles fit that criteria with quarterback Jordan Travis out for the year. This put the Noles in a Chicago Bears situation which means not having a competent quarterback. The #2 guy was awful and the #3 guy was awful and dreadful. While the defense is beyond superb, if FSU went down by a touchdown, a game against a top team would not have a chance. And once you go through the stages of sobering up and maybe looking for the next Toga party on campus, one can move on.

However, angry players are withdrawing from the Orange Bowl and don’t want to play in the consolation game. Something like 8 players from both Florida and Georgia are going to withdraw. There is even talk of just withdrawing from the game altogether. Heck, in the spirt of withdrawing, I as a suffering White Sox fan even withdrew my television season pass after losing 101 games last season. Not sure if the Governor of Illinois can sue them for my distress?

Withdrawing is nothing new in society. Lots of people running for President with minuscule poll numbers withdraw to “spend more time with family.” Happens all the time.

In Real Estate, withdrawing can be used even though many don’t understand it. You need to comprehend how to use it and recognize strategies to prevent it from happening to you….

That’s why you have me here to explain. We had an example of this last week as a more desirable home came on the market and our buyer withdrew the offer to go after the new home leaving the Seller befuddled. Here is an illustration I can explain fully. Once I represented a Buyer who made a written offer on a home in Mirasol. I sent it over and talked to the listing agent. The Sellers agreed to sign. I called the buyer with the good news. The buyer was in Vegas and asked if he could back out. (I didn’t ask what happened at the Craps table as what happens in Vegas stays in Vegas). This was a standard contract (not an AS-IS) which meant he could not cancel once executed. Execution though is the key. I told him to send me a note immediately that he wished to withdraw the offer and I would do so. It was a race at that point. If the seller sent in a fully signed contract and executed with all sets of signatures, then the contract would be intact, and my client could not withdraw. Fortunately, I sent in the withdrawal first and then the contract was null and void. Escrow deposits were returned to my Buyer. The seller was as angry as the Noles fans but “if you move slow expect to take a blow.” I might trademark that!

Either Buyer or Seller can cancel the contract anytime if it’s not fully executed. That is where both parties must have urgency when they want to tie up a deal. With interest rates falling into the 6% territory and season arriving in two weeks, expect competition to be fierce. The lower rates should cause the Ross and Rachel Pent-Up-Demand market of first-time homebuyers and the “precious 3% rate” folks to start to bubble over with activity. For those of you living in a bubble , Ross and Rachel had all this romantic energy on Friends from never telling each other their feelings. Finally on season 10 it exploded. Pent up demand has been building for two years and at some point it’s going to burst. If the Fed drops rates as indicated soon thereafter, the market will explode. The fall period of Buyers dilly dallying ends with now lower rates, seasonal renters arriving on January 1, and snowbirds getting into moving motion. The speed of getting deals executed to prevent one party withdrawing an offer becomes paramount. Especially if you want to remain “friends” with your agent.

Buyers have the upper hand once homes go under contract if they use an AS-IS contract. The AS-IS contract verbiage to cancel a contract at their sole discretion can be used to get out of a deal without consequences. However, Buyers must be careful about this. If the market gets hot, Sellers can refuse to fix items and might have another Buyer waiting in the wings. If a Buyer does want to cancel they must be careful of not first signing an agreement agreeing to a concession and then cancelling a few days later. The agreement to concession (depending on how written) usually waives the remainder of however long the AS-IS period is (default is 15 days but usually written down to 7-10 days). You can read more about Florida contracts here.

As for the Noles, I have to go back to my Chicago roots and Cubs fans friends for good guidance. Just wait till next year!

Jeff Lichtenstein, originally from Chicago, got his start in the home furnishings textile business where he traveled over 35 weeks a year selling fabrics. After the family business was sold, Jeff moved to Florida and became a real estate agent. Today he is the owner and broker of Echo Fine Properties, a luxury residential brokerage voted best brokerage of the year. Jeff manages a non-traditional model of real estate that mimics a traditional business model. Echo has 80 agents, an average of one million dollars per transaction and over 500 million in annual sales. Between traveling for work and annual family trips to national parks with his wife and 2 now adult children, Jeff has visited 49 states. He is also one of the few Chicago White Sox fans you’ll ever meet. Some publications he has been quoted in.

Author of business & leadership book How Making a Sandwich Can Change Your World – The Amazing Success of the PB&J Strategy – Available to Buy Now!

Feel free to ask him a question directly at [email protected] including a complementary valuation of your home.