I represent the Seller. Buyer #1 submitted an offer that was a low. It was the only offer my Seller received in a couple of weeks, so my Seller countered Buyer #1’s offer. In the counter, Seller gave Buyer #1 24 hours to respond.
I just received a full-price, cash offer from Buyer #2. Buyer #2’s offer is a much better offer than the counter-offer my Seller submitted to Buyer #1.
Can my Seller simply cancel the counter-offer to Buyer #1 and accept the new, full-price, cash offer from Buyer #2? The 24 hours for Buyer #1 to respond has not expired.
This question highlights the difference between a “Revocable Offer” and an “Irrevocable Offer.”
According to Louisiana Civil Code Article 1928, an offer that specifies a period of time for acceptance is irrevocable during that time.
Since Seller gave Buyer #1 24 hours to respond to Seller’s counter-offer, Seller has submitted to Buyer #1 an “Irrevocable Offer,” that cannot be revoked until the 24 hours passes.
Thus, I do not recommend Seller cancel the counter-offer submitted to Buyer #1 and accept Buyer #2’s full-price, cash offer because the Seller runs the risk of being under contract to sell the same house to two, different Buyers! (In very sophisticated legal terms this would be considered “Not Good”!!)
For future reference, it might be a good idea to make Seller counter-offers “Revocable.”
According to Louisiana Civil Code Article 1930, if an offer is not irrevocable under Civil Code Article 1928, then that offer is a Revocable offer and a Revocable offer may be revoked at any time before it is accepted.
You can create a revocable offer by not providing a time period for Buyer to respond and by stating in the counter-offer something similar to: “This counter-offer shall be Revocable pursuant to Louisiana Civil Code Article 1930 and may be revoked by Seller at any time prior to Buyer’s acceptance.”
A “Revocable” counter-offer would give your Sellers the flexibility to rescind their counter-offer and accept a better offer from a different Buyer.