When is a contract not a contract

By
Real Estate Agent with Charles Rutenberg Realty of Illinois

A "Seasoned Investor" just asked this question: when is a contract not a contract?  As a real estate professional, I am not an attorney, however, in general,  a binding contract must be signed by the parties involved.  Meaning a buyer and a seller in this case must have a written, not verbal, agreement.  As a Buyer's Agent in Elgin, I can send over the offer to the Buyer's Attorney, but there is nothing the attorney can do to enforce an unsigned contract.  A verbal offer is not a binding contract.  This is often the most stressful time during the buying process, as a buyer may have submitted a good faith offer, with earnest money and negotiations have begun, however a completed, signed contract is not done.  Another offer can still come in and break the first deal, without penalty to the sellers.  So, buyers need to make a sound offer and follow through in a timely fashion.  Don't beat around the bush.  And Buyer's Agents need to make sure Buyers understand that an offer is not a contract until it is signed and agreed upon.  Only then can an attorney be brought in to review and enforce.  Remember, a Buyer's Agent only works for the Buyer, they cannot represent anyone else in the transaction.  They also work for the buyer for free, so use their experience and ask them questions. 

Posted by

Jennifer Kinzle
Charles Rutenberg Realty, e-Pro 

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Topic:
Home Buying
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Illinois
Groups:
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Keller Williams 'Rainers
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Tags:
buyers agent
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contracts
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Rainmaker
128,607
Tony and Libby Kelly
Keller Williams Realty Portland Premiere - Lake Oswego, OR
CRS, ABR, ePro, SRES, CLHMS, CDPE

Definitely.  Too many people do not take the paperwork seriously enough.  Without it, you've got nothing!

May 04, 2009 08:59 AM #1
Rainer
111,923
Jennifer Kinzle
Charles Rutenberg Realty of Illinois - St. Charles, IL
Top Rated Kane County Agent!

And with PDF's, email and E-Fax, turnaround time should be down to near zero for today's Realtor so we can nail down contracts faster!

May 04, 2009 09:08 AM #2
Rainmaker
122,554
Jim Valentine
RE/MAX Realty Affiliates - Gardnerville, NV

Jennifer,  I've heard of court cases where verbal or implied contracts were enforced, but that is a tough way to go.  Best to get the signatures up front and have a "real" contract.  Good reminder - thanks.

May 04, 2009 07:50 PM #3
Rainmaker
192,990
Scott Larson
First Weber Hedeman Group - Monroe, WI
SRES

thanks for the great post, a good reminder.

Scott

May 05, 2009 01:43 AM #4
Anonymous
Jennifer

Hi, Jacquelene,
Thanks for posting your comment! Yes, the contract can be verbally implied. However, it won't hold up without a written offer. If the seller says yes and doesn't sign it, it's not a hard contract. Meaning, if the buyer tried to sue the owner to complete the sale, a verbal agreement won't hold up in court. Contracts must be signed in order to seal the deal. So, a verbal offer is fine to get the ball rolling, but getting a fully executed (signed by all parties) contract will bring about a closing. And you won't be able to close any MLS deals without a written contract, proof of funds and earnest money. Real estate class is interesting, but the real work turns out to be much different in action. Best of luck on your new career!
Jennifer

Aug 28, 2015 06:00 AM #6
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Jennifer Kinzle

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