With low inventory in our market,
and a high buyer demand, we are experiencing many multiple offer situations on
properties. It’s important to pay attention to contract details to be sure that
verbal agreements are finalized and in writing. The Maryland Realtors
association legal team provides the following explanation for what constitutes
a valid contract. There are five elements of a contract: (1) capacity of the
parties; (2) legality of object; (3) consideration; (4) offer and acceptance
(the so-called “meeting of the minds”); and (5) delivery.
The capacity of the parties
refers to legal capacity to enter a contract (i.e., age 18 or older; mentally
competent). Legality of object means it is for the sale of real property that
can be lawfully sold. And, consideration
is a legal concept meaning something of value that is given in exchange
for something else, usually money.
To address acceptance and
delivery, pursuant to the statute of frauds, a contract for the sale or lease
of real property must be in writing to
be enforceable by a party in a court of law. When a buyer and seller
have agreed to the terms of the
contract, but neither party have signed
the contract, the parties have still
not created an enforceable contract because there has been no written acceptance,
and either party may still change his or her mind.
Emails between agents do not constitute a contract, nor do
they obligate the seller to accept the buyer’s offer. The requirements of a
valid contract for real property include offer, written acceptance and
delivery.
Another specification is that
“delivery” of a contract can be verbal. When a seller has signed a contract and
a listing agent has the signed contract in their possession and has given
verbal confirmation to a buyer’s agent of having possession, the verbal confirmation
from the listing agent to the buyer’s agent constitutes “delivery” under
Maryland law. The legal team stated that it’s important to note that knowing
that “delivery” can be verbal, first, the buyer and seller must sign the offer to indicate acceptance and
form a contract. A text, email or phone call from either party saying, “I’m
going to sign” is not sufficient.
Lauren Bunting is an Associate Broker with Atlantic Shores
Sotheby’s International Realty in Ocean City, Maryland.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
