Savvy buyers and sellers always insist that an offer or counteroffer for a home expires within two or three days.
Q. We put our home up for sale in October for $281,000, and a couple offered $249,000 for it a few weeks later. Our agent gave them a written counteroffer for $269,000, but they never responded. We have since signed a contract to sell the house to another buyer for $275,000, but now the first couple has called us back to say they will accept our original counteroffer of $269,000 and that they will sue us if we don't sell the house to them. What can we do?
A. Don't worry. If the counteroffer that your agent presented to the first couple was on a standard realty form, it included a "time is of the essence" clause that required them to either accept or reject your counteroffer within a specified period of time.
The typical clause demands that a prospective buyer's response come within 48 or 72 hours. If the buyer doesn't make a written decision to accept or reject in the allotted time, the counteroffer is automatically voided, and the homeowner becomes free to sell the home to someone else.
Check the copy of the counteroffer that your agent presented to the buyers. If it includes such a clause, you have nothing to worry about. But even if it doesn't, it's unlikely that the threatened lawsuit to force a sale would be successful because it would cause undue hardship to both you and the new buyers.
Your letter, though, serves as a reminder that buyers and sellers alike should always put a time limit of 48 to 72 hours on their offers and counteroffers. Doing so prompts each party to make a decision quickly and can help to avoid problems several weeks (or months) later.
Q. We accepted an offer to sell our home two weeks ago, and the transaction has already gone into escrow. We would now like to take down our "for sale" sign so buyers will stop knocking on our door to ask for a home tour, but our agent says we should leave it up. What do you think? Isn't a for sale sign supposed to be removed when a deal is reached?
A. You can take the sign down whenever you wish, but you should probably leave it standing for at least a few more weeks. A proposed sale can fall apart for any number of reasons. Keeping the sign up could help you land a second offer, which could come in handy if the buyers who made the first offer cannot complete the purchase.
As a compromise, ask your sales agent to put a small "deal pending" sign atop the larger for sale sign. The smaller sign should discourage pesky lookie-loos from bothering you, but won't scare off people who are serious about making a backup offer.
Q. Is it true that filing for bankruptcy can stop the foreclosure of my home?
A. No, but recent studies suggest it could allow you to keep your home for several more months without making a mortgage payment.
Nationwide, the average time it takes to process a foreclosure -- from the first missed payment to a foreclosure auction -- has climbed to 674 days, according to researchers at Florida-based LPS Applied Analytics. That's up from 253 days just four years ago, the new report by LPS says.
It takes a lot longer in Florida, where the process averages 1,027 days. That's nearly three years.
In Washington, D.C., foreclosure proceedings average 1,053 days. Delinquent borrowers in New York stay in their homes for an average of 906 days.
Though some desperate borrowers who are in default struggle to make their monthly payments, others aren't paying a nickel. Nearly 40 percent of borrowers who are in default have not made a payment in at least two years, according to LPS.
Foreclosure can be halted, but usually only temporarily, by filing for bankruptcy. Banks are generally forbidden to proceed with a foreclosure until the borrower's bankruptcy filing wends its way through the court system, which could take several months. But unless your bankruptcy filing calls for you to bring the mortgage back up to date, the lender can typically foreclose after the filing is approved by a judge. Consult an attorney for details.
• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.
© 2011, Cowles Syndicate Inc.