7 ms·

AFAIK, in contract law, an "accepted offer" is an actual contract, even if there's no paper record of it (though it may be a bit hard to prove acceptance withou

by yorwba 7y ago

AFAIK, in contract law, an "accepted offer" is an actual contract, even if there's no paper record of it (though it may be a bit hard to prove acceptance without one). However, when someone puts their house up for sale, they're usually not offering it to anyone yet, rather they're inviting others to offer to buy it. I think a term sheet is also just an invitation, not a binding offer.

whiddershins 7y ago
I believe in nys you can’t have a verbal real estate transaction
Nursie 7y ago
Likely depends on the country - in England, on a house sale, either party can back out after an offer is accepted, free of consequences, until contracts are exchanged.
- richardwhiuk 7y ago
  That's very specific to house sales I think.
  - SamReidHughes 7y ago
    There are some other specific exceptions, like exclusive copyright licensing in the USA.
- hirako2000 7y ago
  And there are unwritten rules in the solicitors community, do that a few times and you are blacked out.
  - dmurray 7y ago
    Does this work? For house buying, solicitors are often taking on first-time clients, and they don't have a lot of leverage against the client if the client decides to renege on the deal.
  - Nursie 7y ago
    By whom? Solicitors get paid for work done until that point regardless, and I doubt sellers have that information when deciding whether to accept an offer, and they are who makes the choice to accept. Sellers also pull out frequently - had that happen to me a few times. It's frustrating but it happens.
- bryanrasmussen 7y ago
  My wife's family is selling a house in Italy and it blew my mind that when you say you want to buy the house you have to give a portion of money (in this case I think it was 12000 euro) which you do not get back if the deal falls through and you don't buy the house. The above not very precise as I am not involved in it and not especially interested. But the detail stuck with me as one of those other cultures are strange things.
  - jedberg 7y ago
    In the US you have to put down an "earnest money deposit", which is sort of the same thing. You can get it back, but there are usually very specific rules about what conditions warrant getting it back, and "I didn't like the house" isn't one of them.
    - wolco 7y ago
      In Canada it is the same and you could get sued in court for the full amount.
    - bryanrasmussen 7y ago
      can you get it back if the bank decides not to loan you the money to complete purchase?
      - sokoloff 7y ago
        In all offers I submitted and both houses I bought, that was the case. That also allows the buyer to get out for any reason within the financing contingency window (by just not complying with all the ridiculous paperwork demands from the lender, "oops, sorry, mortgage didn't end up coming through")
      - xsmasher 7y ago
        That would be a "Mortgage Contingency," which is common in California. Yes, you get back your earnest money if there is a mortgage contingency in the contract but you can't get a loan.
deleted 7y ago
[deleted]
LanceH 7y ago
It is in the realm of "tortious interference" to outbid others then fail to follow through with it, but it isn't generally a contract when two legally represented groups are agreeing over something which is expected to be defined on paper.
gumby 7y ago
TS always has co tingencies to allow the prospective investor to back out. But taking months to close a deal seems absurd.
jalonso510 7y ago
Term sheets do away for the need to speculate about whether there is a binding obligation or not - they always explicitly say that they are not binding, and then both parties sign and agree to that. Industry standards are though that once the term sheet is signed, the deal is 99% sure to happen, unless there are serious problems discovered in due diligence.
anotherman554 7y ago
You are generally correct that contracts do not have to have a paper record, however in the United States, it's usually a state law that real estate contracts have to be in writing. It's a legal concept called the statute of frauds.

by yorwba 7y ago

whiddershins 7y ago

I believe in nys you can’t have a verbal real estate transaction

Nursie 7y ago

Likely depends on the country - in England, on a house sale, either party can back out after an offer is accepted, free of consequences, until contracts are exchanged.

richardwhiuk 7y ago
That's very specific to house sales I think.
- SamReidHughes 7y ago
  There are some other specific exceptions, like exclusive copyright licensing in the USA.
hirako2000 7y ago
And there are unwritten rules in the solicitors community, do that a few times and you are blacked out.
- dmurray 7y ago
  Does this work? For house buying, solicitors are often taking on first-time clients, and they don't have a lot of leverage against the client if the client decides to renege on the deal.
- Nursie 7y ago
  By whom? Solicitors get paid for work done until that point regardless, and I doubt sellers have that information when deciding whether to accept an offer, and they are who makes the choice to accept. Sellers also pull out frequently - had that happen to me a few times. It's frustrating but it happens.
bryanrasmussen 7y ago
My wife's family is selling a house in Italy and it blew my mind that when you say you want to buy the house you have to give a portion of money (in this case I think it was 12000 euro) which you do not get back if the deal falls through and you don't buy the house. The above not very precise as I am not involved in it and not especially interested. But the detail stuck with me as one of those other cultures are strange things.
- jedberg 7y ago
  In the US you have to put down an "earnest money deposit", which is sort of the same thing. You can get it back, but there are usually very specific rules about what conditions warrant getting it back, and "I didn't like the house" isn't one of them.
  - wolco 7y ago
    In Canada it is the same and you could get sued in court for the full amount.
  - bryanrasmussen 7y ago
    can you get it back if the bank decides not to loan you the money to complete purchase?
    - sokoloff 7y ago
      In all offers I submitted and both houses I bought, that was the case. That also allows the buyer to get out for any reason within the financing contingency window (by just not complying with all the ridiculous paperwork demands from the lender, "oops, sorry, mortgage didn't end up coming through")
    - xsmasher 7y ago
      That would be a "Mortgage Contingency," which is common in California. Yes, you get back your earnest money if there is a mortgage contingency in the contract but you can't get a loan.

deleted 7y ago

[deleted]

LanceH 7y ago

It is in the realm of "tortious interference" to outbid others then fail to follow through with it, but it isn't generally a contract when two legally represented groups are agreeing over something which is expected to be defined on paper.

gumby 7y ago

TS always has co tingencies to allow the prospective investor to back out. But taking months to close a deal seems absurd.

jalonso510 7y ago

Term sheets do away for the need to speculate about whether there is a binding obligation or not - they always explicitly say that they are not binding, and then both parties sign and agree to that. Industry standards are though that once the term sheet is signed, the deal is 99% sure to happen, unless there are serious problems discovered in due diligence.

anotherman554 7y ago

You are generally correct that contracts do not have to have a paper record, however in the United States, it's usually a state law that real estate contracts have to be in writing. It's a legal concept called the statute of frauds.