Time for Acceptance? Make the Most of this Provision
The time for acceptance provision in Florida Realtors contracts hasn’t changed recently – but the market has. In a time when sellers often receive multiple offers in record time after listing their home, the time for acceptance provision can become important – and confusing.
ORLANDO, Fla. – Articles in Florida Realtors’ Legal Newsletter in the past addressed the time for acceptance provisions that exist in all the Florida Realtors contracts. However, this article specifically addresses this provision in the context of today’s hot market. Let’s walk through the language regarding the time for acceptance, what it means and the best ways to utilize this section of the contracts to best serve your buyers and sellers.
Using the Florida Realtors/Florida Bar Residential Contract for Sale and Purchase (FR/Bar Contract), the most popular form contract used by members, let’s take a look at the language concerning the time for acceptance of an offer. Note that this article isn’t about counter-offers, although that is covered in the same paragraph of the contract. This article solely focuses on the time for acceptance language.
This is laid out in paragraph 3(a) of the FR/Bar Contract and the relevant portion states: “If not signed by Buyer and Seller, and an executed copy delivered to all parties on or before ___________________, this offer shall be deemed withdrawn and the Deposit, if any, shall be returned to the Buyer.”
Now let’s take a deeper dive into the language of this provision. What is it saying? What does it mean? The buyer should enter a date into the blank line in the first sentence when completing their offer. What is this date? It’s the date by which the seller should respond to the buyer’s initial offer. In other words, this is the buyer saying, “Here is my offer, seller. If you want to take me up on it, respond by this date.”
What does it not mean? This is not the date the parties have to have the contract wrapped up in a neat package. Far too many calls to Florida Realtors Legal Hotline indicate that agents believe this date is a deadline by which everything must be agreed to. That just simply isn’t correct. It is only the date by which the seller needs to respond to the buyer’s initial offer.
Let’s look at an example: The buyer submits an offer to the seller on 6/15/2021. The buyer puts 6/25/2021 in the time-for-acceptance blank line as the date by which the seller needs to respond to the buyer’s initial offer, i.e. time for acceptance date. The seller can either accept the terms included in this initial offer or counter the buyer’s initial offer, but the seller needs to do so by the time for acceptance date, i.e. 6/25/2021.
What happens if seller doesn’t respond by that time? As the contract states, “this offer is deemed withdrawn.” What does that mean? It means that the buyer’s initial offer isn’t there for the seller to accept any longer.
What if the seller wants to still accept the buyer’s initial offer?
A seller can do this, but they need to change the time for acceptance date. The seller also needs to be aware that, in doing so, the buyer is under no obligation to continue negotiations. In other words, if a seller is responding beyond the time for acceptance date, a buyer has to affirmatively acknowledge the change in the time for acceptance in order for there to be a contract.
Let’s go back to our example: The buyer submitted their offer on 6/15/2021, with a time for acceptance date of 6/25/2021. Say the seller responds on 6/29/2021. The seller’s response should include a change to the date on the time for acceptance line. Assuming that is the only change, the buyer would need to initial and date next to that change (and deliver it back to seller) in order for there to be an effective contract.
In other words, when a seller responds past the time for acceptance date, it really becomes an offer from the seller to the buyer. The buyer would have to agree to the change in the time under the seller’s new acceptance date, as well as any other changes, in order for there to be “a deal.”
How do agents make sure they are assisting their customers the best with regards to the time for acceptance?
If you’re a listing agent, it’s important to have a discussion with your seller about how they want to see any offers that come in. Do they want to see offers as they come in? Do they want to wait to consider all offers by a certain date and then consider their options? This is a really important question that should be asked when you take the listing. If a seller wants to see offers as they come in and consider them on a case-by-case basis, that is fine.
However, if they want to wait to consider all offers by a certain date, there is a “best practice” that can be used here so that the seller isn’t potentially losing out on offers. First, get it in writing that your seller wants to wait to consider offers by a specified date. Second, when entering the listing into the MLS, state in the broker comments that the seller wants to consider all offers that are coming in and indicate that buyers should be putting a time for acceptance beyond that date. Why? What good is it for your seller who wants to handle considering offers that way if, by the time they get around to considering those offers, many of them are past the time for acceptance? As mentioned above, while the seller can still respond, why even have to go through the back-and-forth to make sure you have a fully executed contract?
If you’re a buyer’s agent and deciding what date to put in this line, you should educate your buyer about giving sellers a shorter timeframe in which respond, because it can do more harm than good. Some buyers think that giving sellers a short timeline, such as two days to respond after the date they submit the offer, “forces” the seller to respond quicker.
I will be blunt: That just isn’t true. A seller may still respond beyond that time for acceptance, but now there is the inevitable back and forth between the parties to make sure any changes are accepted, and you can define a clear effective date.
Since a seller can respond before the time for acceptance, why not build in additional time to avoid that back and forth? Ask your buyer: How long are you willing to wait for a response from the seller?
You know that under current market conditions sellers often receive multiple offers, and it often takes longer for sellers to consider them. Why limit your buyer’s offer by putting a time for acceptance date that withdraws your buyer’s offer before a seller even considers it?
Realtors help buyers buy and sellers sell. You are there to guide the parties to a successful transaction. Having educational conversations like the above with your customers can only further serve them.
Give buyers the tools they need to make a thoughtful decision on what date to put in the line if you’re the buyer’s agent. Walk sellers through how they want to consider offers at the very start of your relationship so you can account for it accordingly.
If there is one thing all Realtors can agree on, it is that getting the parties to a successful closing is key!
Meredith Caruso is Associate General Counsel for Florida Realtors
© 2021 Florida Realtors®