Verbal Agreements Between Agents, Are They Binding?

by | Nov 9, 2018 | Legal Tips

A Broker in Charge recently called me about the following scenario:

Seller is out of town and listing agent verbally negotiates an offer with a buyer’s real estate agent.  The real estate agents come to an agreement based on the instructions of their respective clients. The listing agent either texts or emails the buyer’s agent that the seller is in agreement and says she will have the seller sign the contract the next day when he returns to town.  Meanwhile, a different agent presents a better offer which the seller decides to accept instead of the agreement the agents negotiated. Can this happen?

This scenario seems to occur more these days as the methods of communication evolves and as agents continue to be busy. There are a few things at work here. First, under the principal/agency relationship the buyer or seller can be bound by the representations and promises made by their agents. However, real estate contracts are required by the Statute of Frauds to be in writing.  Therefore, we do not have a contract until it is reduced to writing and signed by the parties. The text or email is insufficient as it does not contain all the material terms of the contract and is not signed by the parties. The seller can accept a better offer and the buyer can walk.

You should continue to negotiate deals at the direction of your clients in the manner that is best and most effective whether it be via text, phone or email. However, you need to understand the risk and advise your client that while you may have a verbal, email or text agreement, there is no deal until the signed contract is delivered.

BLAIR CATO announces that the attorneys, closers and assistant closers can now receive and generate text messages from their direct dial numbers. We hope this will enhance your communication experience with our firm.


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