BIC TIP #1287: It Is Not a Contract Until It Is

ByStephen Long
Watch Stephen Long explain when an offer to purchase actually becomes a binding contract.

It is not a contract until it is a contract. In this BIC TIP, Stephen Long reminds brokers that the Offer to Purchase and Contract starts life as exactly what its name says: an offer. It does not become a binding contract until the seller accepts it, signs it unamended, and both parties are in written agreement.

An Offer Is Just an Offer

When a buyer submits an offer, they are presenting terms for the seller to consider about purchasing their home. That is all it is at that stage. Nobody is bound to anything yet.

Buyers sometimes get emotionally attached the moment they sign. Sellers sometimes assume a deal is done because a great offer showed up. Neither is true until acceptance happens the right way.

Any Change Is a Counter

The offer becomes a binding contract only when the seller accepts it and signs it unamended. If the seller makes any change, whether the price, the closing date, or a single item of personal property, that is a counteroffer.

A counteroffer is a rejection of the original offer. It goes back to the buyer, who can accept the counter or amend it again. Until both parties agree in writing on the same terms, you are still negotiating.

Texts and Emails Are Not Contracts Here

Stephen points out that there are cases in other states where text messages going back and forth have communicated an offer and acceptance and created a binding contract. That has not yet been the case in North Carolina.

Even so, be careful with your terms in texts and emails. Casual messages like “we have a deal” can create confusion and false expectations. Keep the binding stuff on the written Offer to Purchase and Contract where it belongs.

The Practical Takeaway

Until there is a written offer to purchase signed by both parties in agreement, there is no contract. Everything before that is negotiation.

Set clear expectations with your clients, communicate carefully with the other agent, and do not celebrate until the signatures match. When in doubt, check with your broker-in-charge.

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