How Long Is An Offer Valid For In Real Estate?
Offers aren’t indefinite. You aren’t waiting to hear yes or no and stuck bound to the contract you signed.
Whether you’re offering to buy or to lease, there is an item called the ‘irrevocable’ that stipulates how long the offer is good for. This is important for everyone involved in a real estate transaction to thoroughly understand.
The length of your irrevocable depends on many different factors that will be discussed below.
For purposes of this post and all offer paperwork, Seller refers to both Sellers and Landlords; Buyer refers to both Buyers and Tenants.
• states an exact time and date that your offer expires. During the period from when you sign an offer to that irrevocable – you cannot revoke your offer. You are bound to it if the Seller accepts.
The below screenshot is of the irrevocability section on an offer. This can be an offer to buy or to lease. It covers the following criteria:
- who cannot revoke the offer
(this generally starts off with the Buyer; if the offer is sent back with different terms, it would be crossed off and Seller would be selected)
- time the offer is valid until
- specified date the offer is valid until
Can I Submit Multiple Offers?
No. Unless you’re willing to take on both properties. If you’ve submitted an offer and it is accepted within the irrevocable period you are contractually bound. Submitting more than one offer when you only need one property is a huge risk you should never take.
An Accepted Offer
If an offer is accepted within the irrevocable period then you have a firm deal and binding contract. Congratulations!
A Counter Offer
Many offers result in negotiations. Often this means your offer was sent back with different terms. It could be a different dollar amount, different closing date, different agreement terms or many other things.
If an offer is countered the irrevocable will either:
Stay The Same
– date and time will remain, but it will be applicable for the seller now, not you as buyer
The word ‘Buyer’ will be crossed off and the word ‘Seller’ will be added and initialed.
– depending on when you receive the counter offer, the seller may extend the irrevocable to give you enough time to answer
The word ‘Buyer’ will be crossed off and the word ‘Seller’ will be added. The same will happen for either the date and/or time. All changes will be individually initialled by the Seller.
When an offer is countered – the Seller is essentially ‘offering’ to the Buyer. The balls now in your court.
A Late Acceptance
If the irrevocable expires that doesn’t mean the deal is dead. It means you are no longer obligated to agree if the Seller still sends it back signed and accepted.
If they accept it after the irrevocable it will be up to you as the Buyer to sign the final Confirmation of Acceptance if you still want to go ahead with the deal.
How Long Is A Typical Irrevocable Period?
The irrevocable period depends on many factors. Sometimes the listing will specify a preferred length of time such as 24 or 48 hours. That doesn’t mean you have to provide that length of time, but it is the Seller’s preference.
If it stipulates a reason, such as Seller out of country or Seller works shift work, then you probably don’t want to stray too much from their request.
The most important factor is what works for you. If there’s another property you have your eye on, you don’t want to lose it because you’re tied up in a 3 or 4 day irrevocable on another property.
A typical length of time for leases is 24 hours. It varies more significantly when its a purchase.
If you are the only offer then you have flexibility to provide the amount of time that works for you. You want to make sure not to offend the Sellers by only giving them a few hours, but also not drag out the process giving them time to potentially draw more offers in.
Multiple Offers & Offer Nights
When a property has a specified offer date and time, the irrevocable doesn’t need to be as long. They may ask you register an offer by 5pm and let all agents know they’ll be presenting offers to their Seller clients at 7pm.
In this case including an irrevocable that’s valid for a few hours – maybe until 11pm – is completely reasonable. You know they’ll be reviewing all of the offers at 7pm and the process shouldn’t take more than a few hours.
Ultimately you want to make sure you’re giving Sellers enough time to review your offer without feeling pressured. You also don’t want to give so much time they can leverage your offer to drive up the price or more offers.
Every scenario can vary drastically so it is always best to discuss your options with your real estate agent!
Happy Buying 🙂
Lara Stasiw • Real Estate Agent & Home Design Connoisseur
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