On the 2 Yard Line vs. The End Zone
[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]
Test your knowledge of today’s housing market (and real estate law), and field this question:
Buyers know they officially have a deal with the Seller when:
A. The Listing agent calls the Buyer’s agent (or texts, or emails) to tell them that the seller accepted the buyer’s offer.
B. The Listing agent changes the home’s status on MLS from “Active” to “TNAS.”
C. The Buyer’s agent receives the executed Purchase Agreement and Addenda from the listing agent.
D. All of the above.
Correct answer: “C.”
Here’s the explanation:
A. Verbal agreements to buy/sell real estate ” at least in Minnesota ” are non-binding. To be an enforceable contract,** the agreement must be in writing and fully executed (“t’s crossed and i’s dotted”).
B. A good faith gesture by the listing agent (representing the Seller), to be sure: switching a home’s status to “Temporarily Not Available for Showing” ensures that no other Buyers can see the home (it also turns off the “days on market” meter while the home is being inspected). However, the listing agent can change the home’s status back to “Active” just as easily.
C. Yes, per “A.” A purchase agreement is considered constructively delivered when the Buyer’s agent receives it.
D. No, only “C.” is correct.
**Bonus question: Does the Buyer’s earnest money check have to be delivered for the contract to be valid? Answer: “No” (the Buyer’s promise to deliver it is sufficient).