Occasionally, home sellers receive a “perfect” offer: The buyers agree to pay the full asking price, and aren’t placing any contingencies (requirements such as receiving a good inspection report or being approved for financing) on completing the closing.
It’s understandable that many sellers—and often their agents—believe they must accept a perfect offer. After all, aren’t the buyers giving the sellers exactly what their listing asked for? However, there are currently no U.S. laws that require this. Home sellers are free to reject or counter even a contingency-free, full-price offers, and aren’t bound to any terms until they sign a written real estate purchase agreement.
In order to be legally binding, a contract must contain enough detail for a court to be able to enforce it in the event of a dispute. A promise to purchase real estate without more detail than price and lack of contingencies is not definite enough to enforce, as the parties would still have many more terms to work out. For example, a typical purchase agreement addresses:
And, it’s not enough for buyers to one-sidedly include these details in an offer—it’s also essential that the parties mutually decide on the terms (have a “meeting of the minds,” in legalese) as a matter of their own free will and without undue influence.
Because an offer to buy at the list price with no contingencies addresses only two of the matters that buyers and sellers need to agree on, sellers are free to counter a “perfect” offer or even reject it for any non-discriminatory reason. Unless the buyers and sellers reach a mutual understanding about the details of the arrangement, neither is obliged to move forward with the transaction.
Laws in every state impose two additional requirements on real estate purchase contracts: They must be in writing, and the writing must be signed by all parties. Oral agreements—even if the parties have worked out all the details—are not enforceable. And, even a detailed written agreement isn’t enforceable until all parties have signed it.
This means that even if a potential buyer presents a fully detailed, written contract that meets all of the sellers’ needs and wants, the sellers would not be bound by it until and unless they sign. Because no one can force a seller to sign (contracts must always be signed freely and without undue influence to be binding), a seller doesn’t have to accept even a “perfect” offer.