Counteroffer, Deleted Inspection, and the Backup Bid
On a $329,000 listing, a buyer submits a written offer of $318,000 on a standard South Carolina residential sales form: $3,000 earnest money, 30-day financing contingency, a 10-day inspection and termination right, seller to pay up to 3% of price toward buyer closing costs, closing in 30 days. The seller signs a written counteroffer at $325,000, closing in 21 days, with 'the inspection paragraph deleted,' all other terms unchanged, and states the counteroffer is open until 5:00 p.m. Friday. Friday at 4:00 p.m. the buyer signs and emails it; the listing agent receives it at 4:30 p.m., but the seller is out of town and does not see it until Saturday. Saturday at 9:00 a.m. another buyer offers $332,000, and the seller says he wants to accept that instead.
1. Was a contract formed, and is the seller free to accept the $332,000 offer on Saturday?
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A binding contract exists; the seller is not free.
Sequence matters:
- The buyer's $318,000 offer was the offer. The seller's written response at $325,000 with changed terms is a counteroffer, which by law rejected the original offer - the buyer can no longer simply accept $318,000 terms.
- The seller, as counterofferor, had already signed. Only the buyer's acceptance was outstanding.
- The buyer accepted before the 5:00 p.m. Friday deadline and the acceptance reached the listing agent at 4:30 p.m. - timely whether the contract measures acceptance on dispatch or on receipt. The seller's Saturday signature or later acknowledgment is not what creates the contract; it merely evidences it.
So at 9:00 a.m. Saturday the property is already under contract. The second buyer's $332,000 offer can only be taken as a backup offer, contingent on the first contract terminating. Telling the seller to 'just take the higher offer' would expose the seller to breach - and the listing agent to a claim for interfering with a contract.
2. The buyer signed without reading the changes carefully. What did deleting the inspection paragraph and shortening closing to 21 days actually do to the buyer's risk?
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Deleting the inspection paragraph removed the buyer's exit, not the buyer's right to look.
- The buyer may still hire an inspector (access permitting), but there is no contractual right to terminate or demand repairs based on findings. Discovered problems become a negotiation the seller can simply refuse, and the buyer remains obligated to close.
- What survives: the seller's duty to disclose known adverse material facts and the written property condition disclosure, plus any express warranties. That is a much thinner shield than an inspection contingency.
- 21 days is now a hard performance date. The contract almost certainly contains a time-is-of-the-essence clause and a financing contingency keyed to that date; if the lender cannot perform, the buyer is in default, not merely 'delayed.'
Practical advice: before the deadline, seek a written amendment restoring an inspection/termination right and extending closing to 30-35 days. Expect to pay for it - the seller may want price or deposit consideration. Get it signed; a text from the agent saying 'no problem' is unenforceable.
3. It is now day 10. The buyer's lender says 35 days is needed, not 21. What are the buyer's real options and exposures, and how should the agent counsel them?
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Lay out the three doors and their costs.
- Written extension (best). An amendment extending closing to about day 38, signed by both parties. The seller is motivated by his own 21-day plan, so offer something real: a modest price adjustment, a higher earnest money deposit made non-refundable on the original date, or a per-diem charge for each day past 21. Also confirm the rate lock window; a 35-day need with a 21-day lock creates a separate cost.
- Close on time by changing lenders or products. Ask whether the current lender can issue a clear-to-close by day 21; a different lender or a verified pre-approval may compress the timeline. Do not assume - get it in writing.
- Miss the date (worst). With time of the essence, the buyer is in breach. The earnest money is exposed, and the contract's liquidated damages provision typically caps the seller's recovery at that deposit; the seller may also seek specific performance or actual damages if that clause does not apply.
Counsel the buyer to start the extension conversation before day 21, in writing, and never to let the closing date pass silently while hoping the seller will not notice.