Buy a House in Colorado: It Isn't 'Under Contract' Until It's Signed

Real Estate Agent with The DiGiorgio Group

September 23, 2013 08:48 AM

Really, most people know that when buying a house in Colorado, it isn't 'under contract' until the offer is signed by all parties. In fact, that's probably true in all 50 states (although different terminology may be used).

And the people who should know that even more so than anyone else, are licensed real estate agents.

But just in case anyone out there is working with an agent who doesn't understand this important detail - here is a reminder:

The house you want to buy or sell is NOT under contract until it is signed by all buyers and all sellers.

I recently had a situation where an offer was received, but no lender letter accompanied the offer. I asked for one and while we waited four hours, we received another, better, offer (accompanied by a strong lender letter).

My clients signed the new offer.

The agent who presented the first offer seemed very surprised. She kept saying things like, "I thought we had a deal", and, "We thought you were operating in good faith".

That 'good faith' phrase does get tossed around a lot when someone is unhappy, but the way I see it, my clients were free to accept either offer.

And they did.

I wish the best for the other agent, and hope she finds another home that her client loves just as much.

I don't think I'm terribly heard-hearted, but I am completely confident that my job is to look out for the best interests of my client.

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Rainmaker
420,493

Marnie Matarese

DWELL REAL ESTATE - Sarasota, FL

Showing you the best of Sarasota!

Here in Sarasota where inventory is very tight, I make certain that my offers include proof of funds, pre-approval, copy of escrow check and every document that could possibly be required. The longer an offer sits in the hands of a seller here without being signed the less chance there is of a buyer getting it.

Sep 23, 2013 09:18 AM

Rainmaker
1,267,934

Alan Kirkpatrick

Austin Texas Homes - Round Rock, TX

Alan in Austin

Joetta:

Very nice post. Wow! What a situation. You are right on. All the i's must be dotted and the t's crossed and even then the lawyers may have a say. lol

Sep 24, 2013 01:59 AM

Rainmaker
6,159,967

Roy Kelley

Realty Group Referrals - Gaithersburg, MD

This is a good topic for continued discussion. Those that submit an incomplete contract may end up with some very unhappy clients when they fail to be competitive.

Sep 24, 2013 02:00 AM

Rainmaker
657,117

Joetta Fort

The DiGiorgio Group - Arvada, CO

Independent Broker, Homes Denver to Boulder

Good for you, Marnie. A clean, professionally-presented offer engenders confidence. And really, that's what made the second offer better - it wasn't about the money, the sellers had more confidence in the buyer's ability to buy.

Alan - it's rare around here that attorneys are involved in a real estate sale. But right now, I am waiting on an attorney to review an offer my client made on a FSBO. I can't wait to hear what will come down the pike on this one.

So true, Roy. Although I'm sure all her clients heard was something about how I was being unfair.

Sep 24, 2013 02:05 AM

Ambassador
2,150,011

Debb Janes EcoBroker and Bernie Stea JD

ViewHomes of Clark County - Nature As Neighbors - Camas, WA

REALTORS® in Clark County, WA

And, sadly, this is the outcome when buyers don't have "all" of their ducks in a row before making an offer. The only time I'd honor an unsigned signed contract, is if we had a verbal with one side already signed, and another offer came in prior to signing. I'd still honor the verbal - to me it's a matter of principle.

Sep 24, 2013 08:08 AM

I understand the principle you speak of Debb. But then again, I would never give verbal approval on behalf of my clients, even if they instruct me to. A verbal contract isn't even worth the paper it's (not) written on.

Sep 24, 2013 08:29 AM

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Joetta Fort

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