With any real estate negotiation, there are likely to be offers and counteroffers. It is important to understand what offers remain valid and when they become legally binding. The overview of offer and counteroffer negotiations in MA real estate deals below explains the important aspects of this process.
Multiple Buyer Offers
The market is pretty hot right now. In many cases, sellers are receiving multiple offers on their home. Standard practice in MA is for offers to be made in writing. If a seller wishes to accept a particular offer, he/she would simply sign it and return a copy to the buyer.
Buyers may rescind their offers at any time before a seller officially accepts. Additionally, offers have expiration dates and times. They are no longer valid if the time noted has lapsed. In multiple offer situations, sellers may opt to accept the best offer or engage in negotiations with a particular buyer.
Offer and Counteroffer Negotiations in MA
When buyers and sellers negotiate using counteroffers, only one counteroffer is valid at any given time. All previous offers/counteroffers are void. For example, if a seller submits a counteroffer to a buyer, the buyer’s original offer is void; only the current counteroffer is on the table. If the buyer then submits a counteroffer, then only that counteroffer is valid. The buyer’s original offer and the seller’s originally counter-offer are no longer valid.
At any given time, the party reviewing a counter may reject it. This essentially ends the negotiation. However, either party can submit a new offer later to restart negotiations.
Going Back to Old Offers
Imagine a case where buyer and seller cannot come to an agreement. In the example below, the seller rejects the latest counteroffer and ends negotiations. The buyer, in this case, cannot go back to the seller and accept the seller’s previous counter-offer of $535,000. That offer is no longer active or valid. Instead, the buyer would need to submit a new offer for that amount. The same goes for the seller. He/she cannot have remorse and go back and accept the buyer’s last counteroffer of $527,000 since it was already rejected. However, the seller can go back with an new offer to the buyer for that amount.
- Buyer Makes Offer for $520,000
- Seller Counteroffers $540,000
- Buyer Counteroffers $525,000
- Seller Counteroffers $535,000
- Buyer Counteroffers $527,000
- Seller Rejects Counteroffer
When Offers Become Binding
Original buyer offers are always made in writing in MA real estate deals. However, counteroffers are not always made in writing. They are often made by phone, in the interest of time. In this case, they are not legally binding unless/until made in writing and signed by both parties. In some cases, offer negotiations and acceptance may be communicated via email or text. A recent court case found that these methods of communication may be considered “in writing” and therefore legally binding. Read our blog on this topic for further details.
MA real estate deals can go through a lot of back and forth with changes to price and other terms. Any change to any aspect of the offer (whether it be price, financing, deadlines, etc.) creates a counteroffer. It is important for all parties to understand what offer/counteroffer is currently on the table and when acceptance becomes binding. Open communication is key to offer and counteroffer negotiations in MA and avoids unnecessary legal disputes.