“Congratulations, you’re officially under contract!” That’s the news everyone wants to hear.
The process of negotiations can be exciting, particularly if you are competitive by nature. There’s just something about winning the bid that can be exhilarating, but before getting too celebratory, knowing the difference between when a contract is formed and when it’s enforceable is very important. Timing is critical to avoid being caught off-guard and being left without a solid deal.
Typically, the process gets started when a buyer makes an offer through their Realtor® on a given property. Once receiving an offer, the seller can either respond by accepting the terms as presented, rejecting the offer while making a counteroffer, rejecting it without proposing alternative terms, or choosing not to respond at all. Let’s say the seller responds with a counteroffer. The buyer now has the same options, and this can go back-and-forth indefinitely. When one party accepts the other party’s offer or counteroffer, and their Realtor® communicates that acceptance to the offering party (or their Realtor®) a purchase contract is created. Communication of acceptance is the key component in forming a contract. Keep in mind that in North Carolina real estate sales contracts need to be in writing to be enforceable. When there is verbal acceptance and a buyer is told that the seller is going to sign the contract, it’s not a “done deal” quite yet, because there is no enforceable contract.
Buyers might even assume that once the seller signs the contract, it is official, but there is not a binding contract until the buyer receives notice that the seller has signed the offer. It’s during these in-between phases of the process when the buyer can withdraw their offer, or the seller can be considering other offers, and accept an offer from a competing buyer. The seller’s Realtor® is required to deliver all offers promptly, regardless of when they come in.
Most frequently, sellers want their Realtor® to inform competing prospective buyers that others are in the mix. It’s worth noting that the listing agent is not at liberty to share the price and terms of competing offers to anyone other than the seller without the express authority of the offering party, yet we’ve never encountered any buyers willing to have their offer details shared.
Once under contract, a seller can still receive and entertain offers as backups to the primary contract. Naturally, sellers are thrilled to have a backup contract in place. In fact, this has worked out very well for several of our clients – buyers and sellers alike, but that’s a different topic for another day. If you have questions or want more information about primary contracts or backup contracts, please feel free to contact us.
Wes & Cathy Cleary of Team Cleary Real Estate, Inc. are experienced Realtors® who work full-time as a full-service Real Estate team. They have invested, rented, bought, and sold real estate in the Carolinas since 1997. Lake Lure homeowners since 2002. TeamClearyWNC@gmail.com; Wes 828-785-2115; 828-808-6790 Cathy; www.TeamCleary.com.