Offers and Counter Offers - Expiries
Purpose: This bulletin outlines the requirements of real estate professionals to inform client(s) of the advantages and disadvantages of expiry dates on offers or counteroffers.
This bulletin applies to real estate professionals.
As a real estate professional, you must help your client(s) prepare legally binding agreements. One of the factors is whether to include an expiry date on the time for the other party to consider the offer or counter offer.
Your general and fiduciary duties as a real estate professional in sole agency require that you:
- act in a client’s best interests at all times
- maintain utmost loyalty
- avoid and disclose any conflicts of interest
- exercise care and skill
- do not misuse a client’s confidential information
- act honestly
- obey a client’s lawful instructions
You must not make assumptions on what your client wants to include in an offer or counter offer. You must discuss the advantages and disadvantages of the inclusion of an expiry date and potential strategies with your client. Your client can make an informed decision about how they may wish to proceed. It is the client’s decision to include an expiry date in an offer or counter offer.
Including an expiry date
- creates a sense of immediacy
- offers with expiry dates may be considered before other offers
- removes the need to withdraw the offer
- may not allow parties to consider the offer/counter within the time specified
- may not allow parties with sufficient time to consider/research the implications of the offer/counter offer
You can eliminate the disadvantages by ensuring that parties understand that expiry dates are extendable prior to their expiry.
Not including an expiry date
- allows the other party time to consider the offer
- allows the acceptance of the offer and/or counter at any time, even after the offering party has stopped considering the property
- allows the other party opportunity to receive and consider other offers (seller) or to find other properties (buyer)
A follow-up system, allowing the offer and counter to be formally withdrawn, would negate the first disadvantage.
These same advantages and disadvantages also apply to offers/counter offers to lease.
You must ensure your client know their options and understand the advantages and disadvantages. If your client does not include an expiry date on the offer/counter offer, you should discuss a follow-up system to monitor the status of the offer/counter offer.
If your client wishes to place an expiry date on an offer or counter offer, you can advise them how to choose an appropriate expiry date/time in their situation and how to extend this date if necessary.
You should document these discussions and any direction given by your client.
Brokerage policies and procedures should require real estate professionals to discuss expiry dates with their client(s), enabling informed decisions.
Your broker’s supervisory system should identify all instances where no expiry date was included on an offer or counter offer. This should also include the client’s instructions related specifically to the non-inclusion of an expiry date.
LegislationReal Estate Act Rules - sections 41(b)(d), s.57(g)(h)(k)(m), s.58