Homepath withdrew their counter offer?

Question

Looking for some advice. I recently made an offer on a Fannie Mae property listed on homepath.com. The property was listed for 59k. I offered 43k and they countered at 55k. I then offered 46k and they countered at 42,500. Yes, they countered 3,500 under what I offered them. The listing agent called my agent and told us what had happened and we obviously accepted the offer immediately. We then heard nothing from them for a day followed by them retracting their counter offer. I was always under the impression that once an offer was accepted that was a binding contract, however I don't have a law degree so I figured I would see if anyone out there could offer any insight on this. I do realize it was a mistake on their part however, if it was our side that made a mistake I'm sure they wouldn't hesitate taking the earnest money which was 10k in this case. Thanks for any advice you might have.

Wayne Brooks · Answer

It's not really a "counter offer" from Fannie....they're telling you the minimum amount you need to offer for them to accept.  In any event, verbal offers/emails between agents mean nothing, it's not binding til you have contracts, and their addendum, executed by both parties.

Russell Brazil · Answer

It needs to be in writing and signed by all parties. But even beyond that.....Fannie Mae does what Fannie Mae wants, contracts be damned.

Also on your part it is obvious that their offer was meant to be 52,500, not 42,500. So it isn't really a valid offer even if they did submit it in writing, which I don't think is the case here.

Wayne Brooks · Answer

Bottom line...there was never an offer, and acceptance of the offer (a contract), in writing.

Russell Brazil · Answer

It would never end up in court so it really matters very little what a courts opinion is frankly. No consumer is going to spend tens of thousands of dollars to challenge one of the largest entities in the country. The consumer would be bankrupt before it ever entered a court room. The best that could be expected is it would end up in front of a real estate commission, which is made up primarily of agents and brokers who would find it obvious what the offer was supposed to be. I've seen enough disputes over the years to know how these things end up.

The most important factor though is Fannie does what Fannie wants. You use their addendum and the only interpretation of their addendum that matters is how Fannie interprets it. And how they interpret it has very little correlation to what is on the form.

Brian Eddings · Answer

I really appreciate the quick responses!

Matt Hummer · Answer

@Russell Brazil I would argue your last statement...It might be obvious to you, but it wouldn't be obvious to the courts, which is the only opinion that really matters.  Consider a case wherein the asset manager initially rejects the offeror's original offer, then discovers some other material fact about the property, and counter's the offeror with a lower figure.  Would this not be reasonable?  I'm just playing devil's advocate here...Inference has no legal ground, and I think the OP should consult a lawyer.

Matt Hummer · Answer

This is the basics, but a valid legal contract requires four things: Mutual assent, consideration, capacity, and legality.  A valid offer requires that the offeror make a definite expression of the desire to enter a contract in terms that are clear and unambiguous and that are communicated to the offeree.  An acceptance occurs when, without changing the essential terms of the offer, the offeree communicates an acceptance to the offeror.  Once the offer has been accepted, mutual assent exists.  (Thanks, Business Law with UCC applications, 13th Edition ;)) I think this portion of the law is what you're most concerned with as I'm of the opinion that your contract offers consideration (a house for money), you're legally permitted to assume that the other party to the contract possesses the capacity required, and I'm just assuming that there is nothing illegal about the exchange.

Assuming your offer was in writing (real property contracts require writing), and you appointed your agent in writing, and your agent made the offer on your behalf (or you made the offer directly in writing), AND your contract spelled out clear and reasonably definite terms, AND it was signed, witnessed, and delivered, I would say you've got pretty good grounds to pursue the contract.  I would remind them of their legally binding contract and consult a real property lawyer.  If their offer was $3,500 below yours then that's significant and would more than pay for the hundred dollars it might take for a consultation!

Homepath withdrew their counter offer?

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