Just because you’ve made an offer to purchase that has been accepted by the seller, does not always mean it’s a done deal. There are still a few more hurdles that can pop up between the time the offer is accepted and sales agreement lands on the transferring attorney’s desk.
On a standard OTP document, there is normally a blank section where you can stipulate how long you are willing to hold the offer open. The seller will have until the specified date to accept the offer that you’ve presented, after which it will become invalid.
An OTP can lapse if you revoke your offer. However, you can only withdraw from the transaction during the period the seller has not yet accepted the offer or makes a counteroffer, provided that the contract does not contain a clause that it is irrevocable.
If a seller outrights rejects your offer, the contract becomes void. Your offer may be lower than the asking prices or it may be loaded with contingencies but either way, once they rejected your initial offer or if you turn down their counter offer, the seller may not accept to your previous offer – a new agreement will have to be drawn up.
Finally, an offer lapses in the event either party dies. If the seller passes after signing the OTP, the estate must close the sale. However, it the execution of the real estate transaction may be delayed. If you die, the seller may be able to force your estate to continue with the sale. But it would no longer be practically possible to proceed with transfer if the bank withdraws their mortgage finance.
Whether you are currently in the process of closing a transaction or beginning the journey to find the right home, these examples will help provide some insight into some of the biggest challenges that may arise when buying property.
