Maybe it's a bubble, maybe it isn't; but, meanwhile, Realtors have plenty to deal with trying to guide their clients through the special problems that can arise in a market still characterized by competing buyers, multiple offers, and bids over the listing price.

This was the topic of a recent panel discussion, sponsored by the CAR (California Association of Realtors) Legal Affairs Forum, "The Still Hot Market -- Continuing Issues."

One of the hottest of the hot market issues had to do with communicating the acceptance of offers and counteroffers. It takes more than an offer and acceptance of the offer to form a contract. To be effective, the acceptance must be communicated to the person who made the offer.

In a market where buyers are competing over the same property, and multiple offers may be submitted, the communication of acceptance becomes a critical issue for the buyer.

Suppose, for example, that you submitted an offer of $525,000 on a property that was listed for $550,000, and that you received a counteroffer of $535,000. You find the counteroffer acceptable and sign it. But, because it is now late at night, you and your agent agree that there is no point in communicating the acceptance until the next day.

The next morning your agent calls the seller's agent at 9:00 AM to say that she is about to fax over the accepted counteroffer. But the seller's agent has bad news: not having received your acceptance, the sellers accepted another offer at 8:30 AM. This they had a right to do, inasmuch as the standard CAR counteroffer form states that the seller has the right to "… accept any other offer at any time prior to notification of acceptance … ."

How is acceptance to be communicated? In California, the civil code addresses this issue (sections 1581 - 1583). Generally, "any reasonable and usual mode may be adopted."

"Consent is deemed to be fully communicated between the parties as soon as the party accepting a proposal has put his acceptance in the course of transmission to the proposer … ." Under these general rules then, acceptance would be deemed to have been communicated once the acceptance had been sent from a fax machine, or by telegraph, or put into the mail.

However, the civil code also specifies that the method of communication may be specified within the offer itself. "If a proposal prescribes any conditions concerning the communication of its acceptance, the proposer [the person making the offer or counteroffer] is not bound unless they [the conditions] are conformed to … ."

The standard CAR purchase offer and counteroffer forms do contain such specification. They both state that the signed acceptance is to be "personally received" by the person making the offer or by (fill in the blank -- usually the agent) a person who is authorized to receive it.

While this would seem to be perfectly clear, it is muddled by the norms of everyday practice. It practically never happens that a signed acceptance is personally handed to a principal or her agent by the agent of the person giving the acceptance. Indeed, it is even unusual for an acceptance to be physically delivered to the residence or workplace of either the buyer, the seller, or their agents. These days, it almost always happens by fax machine.

And, while "personally received" may sound like everyday English that everyone understands, the discussion at the Legal Forum showed that is not necessarily the case. Opinions ranged from the purists who maintained that the document must actually be in a person's hands, to the view that having it put in one's "in box" at the office would suffice, to the position that having a confirmation that it had been received by someone's personal fax machine would do it.

The CAR forms in question also contain a line where the recipient can confirm that they have personally received the acceptance. It is not necessary to the formation of a contract that this line by signed or initialed. If there has been receipt then there has been receipt, and that's that. However, if an agent is worried that some competing offer may be trying to slip into line ahead of them, it's a good idea to obtain the confirmation.

Maybe the bubble will deflate, the market will slow down, and matters like this will become non-issues. For now, though, it's something agents need to think about.