Understanding the art of offer and acceptance in real estate

Buying real estate can be a daunting process. Knowing some of the basics before you get started can help make the experience smoother and more legally efficient. Know what you’re buying or selling When you are ready to make an offer on a piece of property, you are going to want to make sure you have an accurate description of the property. Texas follows the Statute of Frauds for real estate contracts. That’s a fancy name for the idea that all contracts for real estate should be in writing and signed by the seller. The Statue of Frauds also requires the written agreement to be complete in “every material detail” and contain all essential elements. This makes it easier if there is a dispute about contract so the parties do not resort to what was said during negotiations. For example, there needs to be a description of the property that can be determined with “reasonable certainty. “ In one case, Texas courts held the description of a piece of property as “101 Windmill,” was not reasonably certain. Even though the parties knew where and what the contracted land was, since the contract did not meet the Statute of Fraud standards, they did not have an enforceable contract. How to accept When a party makes an offer for real estate, the acceptance must be in writing in order to comply with the Statute of Frauds. Otherwise, there will not be a binding contract. In one case, a couple tried to orally accept an offer to buy a piece of land. However, since their acceptance was not in writing, they lost when they tried to sue the seller for the land. If there is a defined method of acceptance, however, then the accepting party must follow that method. So, if the offer says that an acceptance needs to be given to the offeror in 14 days in writing that is exactly how an acceptance should be given. Otherwise, time could lapse and the offer is considered rejected. Offer versus counter-offer When you go to accept an offer it is important to make sure you are truly accepting the offer and not rejecting it and giving a counter-offer. An acceptance is not an acceptance if changes the terms of the offer. This means there must be an agreement between the parties as to what is being bought and sold. So, if a modification materially alters the offer is made in the acceptance, the acceptance is actually a counter-offer and the first offer is considered rejected. Something that would qualify as materially altering a contract would be changing the agreement to buy half of a particular lot to the entire lot. Finally, an offeror is allowed to withdraw the offer prior to acceptance as long as the offeror did not make some sort of promise to keep the offer open for a certain period of time. The Takeaway: A contract for real estate should contain an accurate description of the property. If the buyer gives a different offer than the seller, then the original offer is considered rejected. An acceptance for real estate should be writing. Finally, an offer can be revoked anytime before acceptance absent a promised time period for acceptance.