b-LOG: IRREVOCABILITY. HUH?
By definition: not to be revoked or recalled; unable to be repealed or annulled.
Every offer in organized real estate has an irrevocable time and date, meaning until that time, the offer is firmly in the hands of the seller with the buyer, by definition, unable to revoke or repeal it. Or in the hands of the buyer, with the seller unable to revoke or repeal.
There are a few (+/-) types of offers out there.
Conditional Offers. Ie: conditional on financing, home inspection and/or sale of the buyer’s property.
Unconditional Offers. No conditions. The moment the seller signs on the dotted line, the house is sold pending until the closing or completion date.
The irrevocable is essentially a gesture from the buyer to the seller.
“Hey. How are things? Hope you’re well. Here is
our offer. We’re nice so we’re going to give you until
after dinner tomorrow to respond to us.”
Or there is this version:
“Here. Take this. You’ve got 125 minutes to
make up your mind or else we’ll move on to
Recognizing that literally every offer is unique (the official math is: different property + different humans = unique), every irrevocable will come with its own backstory or intent.
Some use it as a bully tactic. Others due to poor advice. Some are watching the wrong HGTV real estate program. Others have a REALTOR® who wants to play hardball. Others have lost out on the previous 9 deals and can’t wait anymore.
Couple that with how the seller might interpret the irrevocable (expiry time) and you have unique. Some sellers will feel pressured with 24 hours while others only need 11 minutes. The variables are virtually endless.
The Unfortunate Trend©
The Unfortunate Trend these days is when the intent of the irrevocable is misused by the listing Realtor. For example, an offer comes in and all of a sudden they need a 48 hour irrevocable. Or an offer comes in and all of a sudden Russell Realtor (a truly fictional character) needs a 24 hour irrevocable as well as 24 hours notice to show the home. While you wait for your 24 hours notice you find out that an offer came in. And THAT offer didn’t require 24 hours irrevocable because the sellers didn’t want to lose out. And then you find out that the home sold with the listing Realtor representing the buyer.
Not to disparage our industry because the vast majority of Realtors are well-intentioned professionals. But when scruples get put aside for revenue or lack of planning leads to missteps when activity leads to legitimate offers, there is a problem. And at the centre of the entire process is the listing Realtor.
They should be at the helm steering the ship and offering wise counsel to their clients.
So, if you are selling your home, make sure you and your Realtor are on the same page with regards to the offer process. Get the process in writing. Questions to ask:
What notice or advanced warning will we require for showings?
How will we handle offers?
Will we have a pre-planned offer presentation date and time?
Will we require a certain irrevocability?
What will the Realtor do to recognize and leverage activity in YOUR favour?
What will the Realtor do when an offer comes in or is registered?
How will they straddle the client/customer line if they are in multiple representation?
And remember. The irrevocable shouldn’t be a tool to exclude potential buyers or to manipulate a buyer who is standing at the table ready and willing to buy your home.
Questions? Confusion? Need help? Reach out to us anytime.
…and big appreciation to Hans-Peter Gauster for the great puzzle photo. You can find him on your favourite social platform! Except MySpace. He’s probably not there.
Thanks for visiting!