Real Estate

backing out of an unconditional contract - advise

  • Last Updated:
  • Jul 3rd, 2020 12:08 am
[OP]
Deal Fanatic
Dec 24, 2005
5764 posts
1597 upvotes

backing out of an unconditional contract - advise

a friend put an unconditional offer on a home a few weeks ago. a house in Oakville. expiring at 11pm the same day.

at 1030 pm the listing agent contacted her to advise they would accept the offer however wanted a change in closing date. at this point my friend got cold feet and did not want the house anymore whatsoever.

the agent yelled at my friend - and said they had an offer they could accept for the next 30 minutes. no offer was sent back to my friend.

because no offer was ever received back to my friend --> can she get in trouble? was there every really an offer they was agreed upon?

i told my friend to contact a lawyer to confirm.
but if anyone here can provide some input it would be appreciated

coles notes:

unconditional offer given.
never officially accepted with sign back accepting
no deposit provided (i dont think this matters)
Last edited by milolai on Jul 3rd, 2020 1:22 pm, edited 2 times in total.
24 replies
Member
Jan 27, 2018
203 posts
198 upvotes
if sellers signed the offer before 11pm, then buyer is obligated to buy the house from seller. you would either need to complete the transaction, or negotiate something w the seller to back out.

regardless of what happens, agents should not yell. that feels very immature and unprofessional, if its the buyer agent that did the yelling, they should dump the agent.
it feels the agent only cares about the transaction/commission involved.
Deal Addict
Mar 3, 2018
3017 posts
3383 upvotes
GTA
Since she never received any signed documents back through her agent then the offer expired. You indicated this happened weeks ago.
[OP]
Deal Fanatic
Dec 24, 2005
5764 posts
1597 upvotes
deepzerg wrote: if sellers signed the offer before 11pm, then buyer is obligated to buy the house from seller. you would either need to complete the transaction, or negotiate something w the seller to back out.

regardless of what happens, agents should not yell. that feels very immature and unprofessional, if its the buyer agent that did the yelling, they should dump the agent.
it feels the agent only cares about the transaction/commission involved.
no sign back acceptance offer was ever delivered to my friend.

just a verbal and email that the sellers accepted but needed a different closing date.

but no OREA forms were ever sent back.
[OP]
Deal Fanatic
Dec 24, 2005
5764 posts
1597 upvotes
DaveTheDude wrote: Since she never received any signed documents back through her agent then the offer expired. You indicated this happened weeks ago.
this is what i figure.

i assume the actual orea offer has to be sent back to the buyer by the deadline for it to be valid?
[OP]
Deal Fanatic
Dec 24, 2005
5764 posts
1597 upvotes
deepzerg wrote: if sellers signed the offer before 11pm, then buyer is obligated to buy the house from seller. you would either need to complete the transaction, or negotiate something w the seller to back out.
'signed'.
or 'delivered'?

can a document be signed before the deadline and then sent the next day and still be valid?
(i realize in my friends case it is a much longer window...but in the case of next day would it count? or would the offer be dead dead at the deadline if no document received back)
Deal Fanatic
Mar 27, 2004
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Toronto
no sign back, no deposit. no deal.
Full-time Realtor
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Jul 3, 2011
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Thornhill
If you did not receive the confirmation of acceptance prior to the expiration of your offer then there is no agreed upon offer.
[OP]
Deal Fanatic
Dec 24, 2005
5764 posts
1597 upvotes
licenced wrote: If you did not receive the confirmation of acceptance prior to the expiration of your offer then there is no agreed upon offer.
what if confirmation is a forwarded email from seller to listing agent saying

'we accept but need a different closing date'

(i realize their request of a new closing date is a material change....and no longer an acceptance....but had they just said 'we accept'' is that an 'acceptance'. or does it need to be the signed OREA forms returned by the cut off)
Sr. Member
Dec 4, 2004
730 posts
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GTA
milolai wrote: what if confirmation is a forwarded email from seller to listing agent saying

'we accept but need a different closing date'

(i realize their request of a new closing date is a material change....and no longer an acceptance....but had they just said 'we accept'' is that an 'acceptance'. or does it need to be the signed OREA forms returned by the cut off)
If there is a change required before accepting the offer, then the offer was not accepted. A change requires approval from both parties. The seller makes the change on the offer form, sends it back to your friend, and your friend must then initial the change for it to be accepted and fully executed.
Deal Fanatic
Mar 21, 2010
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Toronto
milolai wrote: what if confirmation is a forwarded email from seller to listing agent saying

'we accept but need a different closing date'

(i realize their request of a new closing date is a material change....and no longer an acceptance....but had they just said 'we accept'' is that an 'acceptance'. or does it need to be the signed OREA forms returned by the cut off)
There's no such thing as "we accept, but...". That's just weasel language to put pressure on you to think that their changes are minimal and therefore you are obligated to accept. "We accept" means all they have done is sign the offer you presented. Anything else, any changes to it, is "we reject your offer and counter with the following". They rejected your offer, wanted you to change the closing date, you verbally declined and so they didn't send any paperwork. "We accept, but" is just gamesmanship and means nothing. If they did not sign back your offer with no changes before the cut-off, it's dead.
[OP]
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Dec 24, 2005
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Manatus wrote: If they did not sign back your offer with no changes before the cut-off, it's dead.
thank you
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Jul 3, 2011
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Thornhill
Let's switch up their response to:

'we accept but need a higher purchase price.'

Would you have a binding agreement?

The acceptance of the offer without a change in terms must be communicated to the party making the offer before the offer expires.
milolai wrote: what if confirmation is a forwarded email from seller to listing agent saying

'we accept but need a different closing date'

(i realize their request of a new closing date is a material change....and no longer an acceptance....but had they just said 'we accept'' is that an 'acceptance'. or does it need to be the signed OREA forms returned by the cut off)
Jr. Member
Sep 13, 2007
148 posts
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toronto
@OP how was the offer even made without any consideration? That is a key element of an agreement. This is RE 101. I worry about the agents' caliber here. SMH
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als98 wrote: @OP how was the offer even made without any consideration? That is a key element of an agreement. This is RE 101. I worry about the agents' caliber here. SMH
Hmm, How'd you come to that conclusion?
[OP]
Deal Fanatic
Dec 24, 2005
5764 posts
1597 upvotes
als98 wrote: @OP how was the offer even made without any consideration? That is a key element of an agreement. This is RE 101. I worry about the agents' caliber here. SMH
fwiw - the deposit is pretty normal to be given when the offer is accepted. moreso during these trying times.
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Feb 11, 2009
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als98 wrote: @OP how was the offer even made without any consideration? That is a key element of an agreement. This is RE 101. I worry about the agents' caliber here. SMH
"Consideration" is typically due within 24 hours of the offer being accepted, no one sends a bank draft with an offer unless you're buying Pre-Con.


OP - Your friend is good to go. There's no backing out, as there was no acceptance....a "But..." invalidates any acceptance as they were basically giving you a counter at 10:30, that too verbally.
Realtor - Investment Properties
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Thornhill
deal_with_singh wrote: "Consideration" is typically due within 24 hours of the offer being accepted, no one sends a bank draft with an offer unless you're buying Pre-Con.


OP - Your friend is good to go. There's no backing out, as there was no acceptance....a "But..." invalidates any acceptance as they were basically giving you a counter at 10:30, that too verbally.
Except the deposit which is what you mean is typically due within 24 hours, is NOT consideration.
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Feb 11, 2009
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licenced wrote: Except the deposit which is what you mean is typically due within 24 hours, is NOT consideration.
I'm not going to pretend I'm a lawyer, but to me that's exactly what "Consideration" would be.

Consideration: "Something of value to which a party is not already entitled, given to the party in exchange for contractual promises."

Something of value: A deposit of $X

What is it for? In exchange for a "Contractual promise" of selling the house to the buyer.

Feel free to correct me where I'm wrong.
Realtor - Investment Properties
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deal_with_singh wrote: I'm not going to pretend I'm a lawyer, but to me that's exactly what "Consideration" would be.
But you're a registered real estate saleperson and you're supposed to know, consideration is not the deposit.
Consideration: "Something of value to which a party is not already entitled, given to the party in exchange for contractual promises."

Something of value: A deposit of $X

What is it for? In exchange for a "Contractual promise" of selling the house to the buyer.

Feel free to correct me where I'm wrong.
Yes, I am going to correct you.

A real estate contract is formed when a promise in exchange for a promise is agreed upon.

The seller's promise is to transfer their property to the buyer whose promise is to pay for it in some form or fashion - that is the consideration. Payment could be a grain of sand, a plant, whatever.

As long as there is a promise for a promise, there is consideration.

This consideration is considered binding but in the days of our English ancestors, something called a seal was added - a red wax droplet with the King's or Lord's ring impressed into it that represented a sacred promise that the promises exchanged would not and could not be revoked without agreement. This became the replacement for the consideration - I'll give you this, in exchange for that.

Further and more importantly, the deposit is a long established gesture of good faith. It is not an essential part of a contract, it has never been an essential part of a contract in English Common Law.

The deposit i sa term within the agreement that if not delivered on time is breach of the agreement, but it does not void the agreement.

I understand you are a new registrant who may not yet have taken the real property law course yet and cannot know this, but if it's any consolation, many within the industry - some with 1 or 2 decades even, still don't know that one simple fundamental fact that is so detrimental to how we guide our clients and when it's not understood it can mean a law suit that a buyer cannot win.

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