Buyers want to know why sellers called for a ‘cool-off’ period
Sep 29, 2023Marketwise column for the Bay Area News Group and its flagships The Mercury News and East Bay Times | Published: September 23, 2023
By Pat Kapowich
Question: Against our better judgment, we, as homebuyers, submitted a purchase offer without contingencies. The strategy failed. Instead of an offer of acceptance, we received a counteroffer. They require a three-day “cool-off” property contingency. We were shocked. We endured lively exchanges with our buyer’s agent, who claimed, “Everyone is making noncontingent offers” and “Nonrefundable earnest money deposits are part of the process.” He was wrong. This surprise left our talkative buyer’s agent speechless.
We signed the seller’s counteroffer. We are in contract. But why did the sellers and their agent give us three days to “cool off” with a property contingency?
Answer: In Silicon Valley, as the dot-com era heated up, the number of contingencies in a purchase offer went down. It was alarming. I rally against it on my soapboxes, including this column. Soon, to counter this trend, the real estate attorneys for Alain Pinel Realtors and Coldwell Banker Northern California crafted advisories for home sellers — the sellers, not the homebuyers.
The advisories worked well. The warning was clear. It was at the peril of home sellers who accepted offers lacking property contingencies. Agents and agencies were to be held harmless.
In California, most legal claims target home sellers. Allowing homebuyers a cool-off period or inspection contingency strengthens a home sale while reducing litigation. Full stop.
Real estate attorneys have shared with me the statements that disgruntled homebuyers use during legal claims:
- “I relied on my agent.”
- “I did not understand what a contingency is, and had I known, I would have used a contingency.”
- “We were told our offer must be noncontingent.”
- “I did not understand how contingencies work; my agent never explained it.”
- “Had I known (__fill in the blank__), I never would have bought this house.”
- “We relied on our agent.”
Market conditions keep changing. It is still a seller’s market. Like yours, some buyer’s agents might have permanently excluded contingencies during their short career. That is startling. In your case, the home seller and seller’s agent have good intentions. That is priceless.
Questions? Or are you or someone you know navigating life’s transitions? Let lauded negotiator Pat Kapowich make your next move easy. Visit Kapowich’s website for free area housing data, insights and trends. Or put his artful blend of specialized credentials, decades of experience and endorsed skill set to work for you. Kapowich instills confidence when buying, selling, relocating or resizing homes. Do not just make a move — make the best move. Contact him today, Realtor Pat Kapowich, a career-long consumer-protection advocate.
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