I represent the Buyer. On Friday at 12:00 noon, we submitted an offer on a piece of property. On Friday night, the Buyer found another house online that he wants to buy (the house has more square footage and is cheaper). Can my Buyer cancel the offer on the first house and put another offer on the second house?
With more and more buyers using the Internet as their primary source for information during the home buying process, you will see this situation happen more often in the future.
The answer to your question depends on whether the Buyer used the Louisiana Residential Agreement to Buy and Sell (i.e. the standard Purchase Agreement) promulgated by the Louisiana Real Estate Commission. (If you are a real estate agent licensed by the State of Louisiana, then your Buyer, most likely, used this form).
Before we can answer the question, let’s take a look at some relevant Louisiana Statutes in the area of “Offer and Acceptance.”
According to La. Civil Code Article 1928, an offer that specifies a period of time for acceptance is irrevocable during that time. In other words, this type of offer cannot be canceled/rescinded/revoked during the time period that Buyer gave Seller to respond.
If no time is specified in the offer, but if the offeror manifests an intent to give the offeree a delay within which to accept, then according to La. Civil Code Article 1928, the offer is irrevocable for a reasonable time. (What is a reasonable time? Unfortunately, that’s often for the Court’s to figure out!)
According to La. Civil Code Article 1929, an irrevocable offer expires if not accepted within the time prescribed.
According to La. Civil Code Article 1930, if the offer is not an irrevocable offer, then the offer is a revocable one and may be revoked before it is accepted.
Finally, according to La. Civil Code Article 1931, a revocable offer expires if not accepted within a reasonable time.
Applying the statutes above to your question, if your Buyer used the standard Purchase Agreement and specified in lines 373-376 a time for Seller to respond, then your Buyer has submitted an irrevocable offer to Seller and your Buyer cannot cancel/rescind/revoke the Offer during the time period specified in lines 373-376.
So, if your Buyer gave Sellers 48 hours from Friday at 12:00 noon to respond to the Buyer’s offer, then Buyer cannot cancel/rescind/revoke this 1st offer before Sunday at 12:00 noon.
If the Buyer puts another offer on a 2nd house before this 1st offer expires, then the Buyer could potentially be under contract for 2 houses at the same time!
Once the time period outlined in the 1st offer expires, I recommend the Buyer revoke the 1st offer in writing and immediately transmit that revocation to the 1st Sellers. Then Buyers are free to put an offer on the 2nd house.