Can a bank make a counter offer "good for 24 hours" and then rescind it 3 hours later?

Asked by Animalfriend, Mount Airy, NC Wed Nov 3, 2010

I made a cash offer on an REO property. The bank accepted the amount, but countered the terms; I asked for 10 days to inspect and they wanted 3 days. They stated their counter offer was good for 24 hours.

When my realtor called me with this information, I was inclined to accept, but I wanted to be sure I could get the electricity and water turned on immediately and line up a home inspector. I told her I had to make some calls and would get back with her. She said I was guaranteed 24 hours, so I had some time work it out. I started making phone calls and was waiting for call backs when the realtor called back 2-3 hours later and said the bank rec'd another offer and decided to do "highest and best." This is an investment property that I'm not hung up on it and don't care to fight them; I'm just curious if they can specifically state an offer is good for 24 hours and then rescind 2-3 hours later. It sometimes seems there are no rules when it comes to dealing with banks.

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Animalfriend, Home Buyer, Mount Airy, NC
Thu Nov 11, 2010
Thanks for the insight. It's all been very helpful. I especially appreciate the information on the inspection time, as I thought 10 days was standard. I've purchased 3 other foreclosures in the area and was given 10 days for those, so I didn't realize that could hurt my offer. I'll bear that in mind for the future. I previously purchased several foreclosures in my home state of PA and was not given any time to inspect. I didn't know to ask for it at the time and my Realtor never suggested it. Live and learn. Two of them turned out okay, but the third had many surprises... none of which were good.

In the case of this house, we did highest/best and never heard anything, so my Realtor called the bank a week later. They told her they had accepted another offer, but it fell through, so she was welcome to resubmit my offer. (I don't know why they didn't contact the other buyers.) She submitted it again and we're waiting - again. I guess it's all part of the process.

Thanks again for the information. I truly appreciate it!
0 votes
MaryAnne Dor…, Agent, Myrtle Beach, SC
Wed Nov 3, 2010
Contract law is contract law whether it is a bank or a private seller. Until everyone has agreed on terms and conditions, signed the contract and all parties have a copy the seller is allowed to accept any other offer that comes along or the buyer may rescind. Even if you have verbal conformation of acceptance of an offer, it needs to be in writting to be enforceable.

I understand it is hard being in this situation. I am sorry this has happened to you. Good luck in the future.
0 votes
Gerard Dunn, Agent, Chevy Chase, MD
Wed Nov 3, 2010
An offer can be recinded at ANY TIME until it is accepted or expires. Although they may have initially said you had up to 24 hours to accept - they have the right to change their minds.

Good luck!

Gerry Dunn
Associate Broker
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Nov 3, 2010
Unless it is in writing, it is not binding. Verbal offers or counter offers are hear say, banks usually issue a counter offe rin writing in the form of their counter offer addendum. Most counter offers state this offer will expire in 24-72 hours. It also states that the offer should not be considered accepted until signed by all parties. this allows for the sceanrio if another offer comes in, the bank will go back and ask for highest and best offers from all aprties unless the listing agent disclosed there were other offers and asked the buyers for their highest and best and submitted them that way which can save alot of time "waiting' for the bank to accept or counter something. It is common for the bank to allow only 3-7 days for a home inspection. They will virtually never accept longer than a 7 day contingincy, your agent should have told you this and not submitted an offer with a longer date.

Please see my blog with some advice and tips on making offers on bank owned homes.
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