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Personal Finances / Buying or Selling a Home

URL:  http://boards.fool.com/i-dont-know-what-state-you-live-in-but-in-ca-30626477.aspx

Subject:  Re: Landfill < 1 mile away? Date:  4/8/2013  1:09 AM
Author:  foo1bar Number:  125070 of 127715

I don't know what state you live in, but in CA, it's not a contract until all contingencies are signed off.

You ask any lawyer if it's a contract once both parties have agreed to it.
They will *all* tell you that it is indeed a contract.
There may be numerous ways for the contract to end - but that doesn't mean it isn't a contract.

Perhaps a lender told you it's "not a contract" unless the contingencies are signed off, when what they really should have said is "It's not a contract that we can lend on".


Perhaps we have to start with "what is a contract" - and we'll see that the accepted offer (or accepted counteroffer) is indeed a legal contract.

A contract is:

1> An offer ("I'll buy the house for $100K - here's my signed offer to purchase it.")
2> An acceptance ("OK - here's my signature agreeing to it.")
3> Consideration (The earnest money deposit and the promise that the seller will sell the home to the buyer)

Once those 3 elements were met, it's a contract.

Once the offer is accepted, there are multiple ways that contract can end - including
1> exercising of a contingency clause in the contract
2> by mutual agreement of both parties (unlikely here IMO - unless the builder/seller has no inventory left and has another interested buyer waiting that will pay more)
3> with a completed sale
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