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Elizabeth Weintraub
When is a California Purchase Offer Legally Binding?
A purchase offer is legally binding when legal delivery has been confirmed.
My seller asked when is a California purchase offer legally binding? He had accepted a buyer’s counter offer, signed all of the documents. We sent the package back to the buyer’s agent and asked for confirmation. Tick, tick, tick. No confirmation came. Next morning, tick, tick, tick. No confirmation. Then the buyer’s agent sent an email to say the buyer was over the top with excitement. Only little problem? We are not in contact.
Why isn’t the purchase offer legally binding? The seller accepted the buyer’s counter to the seller’s counter, so we have completed agreement, right? Not so fast. We don’t have a ratified contract. The reason is the buyer’s agent did not name herself as the recipient of the counter offer. The agent left that spot blank. Which means it defaults to the buyer to initial and confirm receipt.
We had no confirmed receipt in writing from the buyer. We did not have a done deal. And wouldn’t you know it? Another buyer wrote an offer and submitted it quickly for about 5% over the list price. The amount was significant. This new buyer really wanted the house. As a listing agent with a fiduciary to the seller, this is a situation that required immediate attention.
First, I notified the seller to see if he wanted to take the new 11th-hour offer. It was a lot more money. It was also subject to an appraisal, but same situation as the offer he accepted. Would it appraise at that inflated value? I gave it a 50 / 50 chance, which is pretty good. If it didn’t appraise at list price, the seller can still sell at the appraised value. Plus the odds are good it might fly at that price.
I let him know we could withdraw the accepted Buyer Counter Offer and take the other offer, if he so chose. Not my decision. My responsibility is to relay the pros and cons of the situation and let the seller choose. But the seller decided he likes the first buyer who is buying his home and will stay with the existing offer. See, you never know.
The point is to give the seller enough information so the seller can make an intelligent and informed decision. It is not to make the decision for the seller nor to sway the seller’s thought process.
Second, I notified the first agent again that we had not received the buyer’s confirmation and let the agent know there is another offer that is much higher.
Even so, we did not receive the buyer’s confirmation until around noon the following day. My seller is a sweet, kind, caring person and money holds a lower priority to him. If this seller was some other guy, I can wager dollars to doughnuts, he would have taken the higher offer in a heartbeat. This particular buyer could have lost her dream home because the agent left blank the spot for delivery.
Still, this is an excellent case study to answer the question of when is a purchase offer legally binding. As a Sacramento Realtor, when I find myself saying, “well, technically,” that means it is not binding until one more action happens. In this crazy Sacramento real estate market, buyers can get squeezed out on such technicalities.
Listing Agents: Watch for Purchase Offer Mistake on CAR RPA
Buyers don’t know what they sign so purchase offer mistake happens.
The most common type of purchase offer mistake I am noticing lately in a California Residential Purchase Agreement is a checked box that could cost the seller a ton of money if it’s not countered out of the contract. Now, true, some buyer’s agents go crazy hog wild checking boxes left and right. I see contracts that state the seller will pay all HOA fees when there is no homeowner’s association. Or, they state sellers will pay city transfer fees when the property is not located in a city.
One of the main ways buyer’s agents make a purchase offer mistake is by uploading a template in which all of the boxes are checked. I know that’s possible because I use a template for the MLS Profile, and every so often, I forget to uncheck “tile” and check “comp” because my template is set up for tract homes. I sell a lot of tract homes.
But I also move a lot of inventory in the Capitol Corridor and tile is not a common type of roof in the inner city. Fortunately, I have back-up protections in place. Often, my fabulous office assistants will question how a roof can be both tile and comp and they correct it. Or the sellers notice it and they have 3 changes to fix errors prior to publication.
Not so when we’re talking about a purchase offer mistake that is about to change the terms of the contract and the buyer’s agent just messed up. I’m talking about Paragraph 7-2 Bi and 7-2 B ii. These paragraphs refer to the seller paying for government-mandated retrofits and also, without naming it, the Water Conserving Plumbing Fixtures law.
This law says all homes built before 1994 must have water conserving plumbing fixtures. However, it is not a contingency of sale. Sellers are not required to replace all of the non-complaint shower heads, water faucets and toilets. UNLESS that box is checked on the RPA. Do you see the problem? If a listing agent doesn’t catch this mistake and remove it from the contract, her seller could be in for a world of painful, unexpected expenses.
Of course, it’s also possible since the buyer’s agent most likely checked that box in error, so the buyer’s agent would never realize she could demand the seller bring all water plumbing fixtures to compliance. But who would take that chance the agent wouldn’t notice it? Agents aren’t stupid. My name is Mork. They just make mistakes.
Ever Hear an Agent Say I Don’t Want to Waste Anybody’s Time?
Agents might reconsider saying I don’t want to waste anybody’s time
When an agent prefaces an email by writing I don’t want to waste anybody’s time, the first thought that pops into my head is then why are you talking to me? Who are you, Al Pacino? If you truly don’t want to waste anybody’s time, it would seem as though you’re about to do that very thing you were hoping to avoid. I suspect what they mean to convey is they are about to say something the recipient does not want to hear.
In part, that’s probably true. Saying I don’t want to waste anybody’s time generally means the agent is probing for some kind of guarantee that the seller will be receptive to a lower offer. Further, it’s not really the seller’s time nor the listing agent’s time the buyer’s agent is worried about. It’s their own time. They don’t want to waste their own precious time.
But you know what? Sacramento real estate is all about writing offers and negotiating. You can’t know how a seller will respond until we present an offer in writing. Verbal offers are meaningless. A seller can’t legally accept a verbal offer. This means the buyer can’t go into court to complain, but your honor, she promised to sell me the house and didn’t. The judge will say show me the offer.
There are no guarantees prior to presenting an offer in Sacramento real estate. Every single agent, pretty much, who writes a purchase offer is potentially wasting his or her time. I want to ask agents who pull out that verbiage from their arsenal just how do they conduct any business? Are they so lazy that they email every listing agent to ask, hey, if I wrote an offer, would your seller take it? See, I don’t want waste anybody’s time.
Maybe they can’t handle rejection, and if the offer is never presented because it’s never written, they were never rejected. On the other hand, how many offers do you think fall by the wayside because they never materialized into a signed purchase contract? And they never materialized into a contract because the agent was too damn lazy to type it up.
Probably quite a few, would be my guess. Because you never know how a seller will respond. If the seller counters, you never know how a buyer will respond. That’s the beauty of negotiation. You get in there and do your best. You don’t sit on a high horse filing your nails and muttering: I don’t want to waste anybody’s time. That’s a sure-fired way to never go into contract.
Please don’t say to a Sacramento listing agent: I don’t want to waste anybody’s time. The truth is I have nothing better to do in my job than help my sellers negotiate a purchase contract. Believe it or not, that’s what I do for a living. It’s not called wasting time. We call it selling real estate.
The Worst Purchase Offer Ever in 40 Years Says Realtor
This Sacramento Realtor did not expect to see an offer top Worst Purchase Offer Ever.
To hold the dubious honor of worst purchase offer ever received by this Sacramento Realtor, it’s got to be pretty bad. After all, you figure I probably receive around 300 to 500 offers, I’m guessing, every year. In just 10 years, that would mean reviewing 3,000 to 5,000 purchase offers, on average. Over 40 years, it’s a crazy number of purchase offers. I’ve received doozies in my day but this is the worst purchase offer ever in 40+ years.
When the buyer’s agent is, um, overly emotional as well, it adds to the unwanted drama. Just the other night, an agent asked if my sellers would do XYZ for her buyers. She didn’t want to bother to put the offer into writing unless the sellers agreed verbally to accept. Huh? Anybody who is that lazy doesn’t deserve a response. I wanted to say, look dude, put it in writing because verbal means jack shit. But I sensed she was not receptive to the real world. After the sellers rejected, she launched into a tirade. I have no time for craziness, certainly not from an agent we aren’t even in escrow with.
There was no money in listening to dribble.
Wah, the agent whined, why won’t you do what I want? In that agent’s world, the sellers should do exactly what she wants. Not gonna happen. I was crystal clear. Agent was whine, whine, whine; then the insults began. What was next? Crying? I suggested we were done discussing, that our time for talking was over. But no. She continued texting with such hateful vitriol that I demanded she put a sock in it. For crying out loud, geez, Louise.
The sellers were interested in reading her text messages. So I forwarded them. Agents should be careful what they write in text messages or any kind of communication.
What were the odds I’d encounter another emotional outburst so soon? Pretty darn good, it turned out.
Because the worst purchase offer ever arrived in my email shortly thereafter. Our counter offer corrected 11 mistakes in that California Residential Purchase Agreement. The sales price was below market value, what we call a lowball. The buyer’s agent asked the sellers to pay $1,000 for a home warranty. Holy Moses! Don’t believe there is such a product. The agent also asked the sellers to pay ALL of the closing costs. Seriously?
The agent checked so many boxes that do not apply, including asking the seller to replace all of the water fixtures in the house, which I suspect the agent didn’t even realize was the result. When I logged into MLS to find the agent, I could uncover no sales and no evidence the agent is a member, no record. Not surprising.
Adding insult to injury in this worst purchase offer ever, the agent typed some other seller’s name into the offer, making us wonder if the buyers were writing multiple offers. Not all naive agents can keep deception straight. The first sign we might be in trouble was when the agent handed my team member two business cards: one for real estate and another for selling a local food item. The second sign was the manner of introduction of the agent and the offer.
The agent sent an email announcing the house was peculiar and odd, and that it suited only certain tastes. Fortunately, the agent exclaimed, the buyers liked it! That’s a self-defeating way to say hello. Berating the home. There was also nothing odd about the house. What a great idea, in that agent’s mind — slam the house, insult the seller and listing agent, and write about the worst offer anybody has ever seen. What a recipe for success!
Usually, things like this happen when an agent is new or from the Bay Area or both. They write offers differently in San Francisco. However, I could not believe my eyes. I asked if the agent was from out-of-area, because most agents in Sacramento know local custom and how to write a purchase offer that gets accepted. Let’s just say the agent did not appreciate that question.
Yet when I asked if the buyers would pay list price, the agent, without hesitation, said sure, write it up. That’s hardly legal fiduciary to a client. Those poor people.
I try to help new agents and any agent who could use a little direction, for that matter. I was a new agent once. Haven’t forgotten what that is like. Not every agent appreciates a sincere offer. Egos and insecurity. Even after the agent exploded outta nowhere, flinging a series of late-night email drama in my direction, I still wanted to do what we could to salvage the transaction for my seller. But that was not about to materialize. Far as I could tell, the agent is not a Realtor. Probably part of the problem. Unsupervised. No Code of Ethics.
So for now, this will just go down in history as the worst purchase offer ever. Nothing beats this contract. I hope this is not indicative of the way Sacramento real estate is moving and it’s just a fluke. Plus, I hope to never see another but I know deep down there will come another day.
How to Find a Gardener for a Hawaii Garden in Kona
A Monarch butterfly flies over my Hawaii garden in Kailua Kona.
Since I don’t take care of my garden at home in Sacramento, I most certainly don’t have time to tend to my Hawaii garden when I’m in Kona. For one thing, I’m too busy half the mornings and early afternoons working on Sacramento real estate. The best time to work in a Hawaii garden is morning, before it gets too humid. However I ended up spending almost the entire weekend cutting down branches, trimming palms and raking dead leaves.
Row of palms are about 15 feet in the front yard.
Then it dawned on me, this is something our gardener should be doing. He comes once a month. His guys buzz in with their chainsaws and leaf blowers, but they can’t trim our coleus straight to save their lives. They leave all of the dead tree tops in the trees to whither, which is a ghastly sight. Within 15 minute they’re done and gone.
Hibiscus and coleus line my neighbor’s house on one side
Our fig tree was growing on top of the neighbor’s house. An avocado in the front seems to be dying. Definitely, I need a new gardener. It’s been only 2 months since I was last here at the house, and our Hawaii garden is a disaster.
Freshly planted annuals in the volcanic soil below more varied vegetation.
Funny story. As I hauled 8 large trash bags from the yard, stuffed with green waste, I met a woman walking her dog. Turns out Linda is from Roseville, California, and just moved here in January. I invited her to tour my Hawaii garden.
Anthurium, left, and annuals in planter on side patio.
We have avocados, I said with great pride. I’ve been watching them since last June and they seem ready to pick. They are really big now. I’m not sure what kind of avocado they are but I’m thinking Reed. I plucked the biggest avocado, about the size of a small grapefruit, and handed it to Linda. I will share my avocados because that’s what neighbors do.
Linda’s eyes grew big. She stretched out her hand eagerly to grasp the avocado. She smelled it. With a slight grin, she replied very matter-of-factly: “That’s a lime.”
What I thought was an avocado was not.
Boy, did I feel like an idiot. I laughed and laughed. All this time. I obviously cannot tell the difference between an avocado and a lime. But at least I know how to grow a pineapple in Hawaii.
Today I made progress. I thought to myself, who would know a good gardener? I know! A Realtor. Because Realtors are Referral Central. I know that since I am a Sacramento Realtor. I called the agent who listed this house originally and sure enough scored a gardener who is coming over tomorrow to tend to my Hawaii garden.
