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Are verbal offers binding?

Agreements to buy and sell real estate must be written to be enforceable. A real estate agent is obliged to convey a verbal offer to the seller. However, if the offer isn't written, it's not legally binding on either the buyer or the seller. It's rare that real estate purchase offers are accepted without a counteroffer, even if the price is acceptable. Home purchase offers are complicated legal documents that include all the details of the sale--the personal property that's included and excluded, the closing date, the financing arrangement, and the inspection conditions, to name a few. Buyers and sellers frequently have a counteroffer dialogue back and forth before they finalize all the terms and conditions of their deal.

Even though a seller may be negotiating with one buyer, this doesn't preclude him from entertaining offers from other buyers. Until the purchase contract and any counteroffers are accepted in writing by both the buyers and the sellers, the property is still available for sale. FIRST-TIME TIP: Timing is critical in real estate transactions. So it's important to make arrangements for times when you'll be unavailable to make an offer or respond to a seller's counteroffer.

Today homes are often sold with the help of the telephone and facsimile transmission. Facsimile signatures are usually binding as long as the intent is to sign the original documents at a later date. You and your partner can sign separate copies of the same document. Make sure, if you're using facsimile copies, that the text is legible and that you know and understand what you're signing. Also, if you're having contracts faxed to your office, you might want your agent to send the documents at a time when you know you'll be available to retrieve them.

If you're leaving town in the middle of a negotiation and you won't have access to a fax machine, you may want to give your power of attorney to a trusted friend or relative. To be legally binding, the power of attorney should be on the proper form and it should be notarized. Your real estate agent can help you with this. But don't give a power of attorney to your agent. This would create a conflict of interest because your agent is owed a commission if the sale goes through. Some agents present offers, and negotiate on a buyer's behalf, with a written authority letter from the buyer. This letter is not notarized. Be aware that when an agent signs a real estate contract for a buyer, without a power of attorney, it's not legally binding. So, even though a written authority letter saves time during the negotiation process, you could lose out to another buyer whose offer is properly signed. You also risk committing to terms you hadn't anticipated if you're dealing with a less than scrupulous agent.

Don't rely on e-mail for making real estate offers and counteroffers. An e-mail isn't signed so it's probably not a legally binding document.

Taking short-cuts when you're trying to buy or sell real estate is risky.

Copyright 1998-2005 Dian Hymer. Distributed by Inman News Features