Real Estate Purchase Contract Basics

This post is in response to a call I received this week from a distraught buyer who thought he had a contract on a home.  Before he had a chance to sign a purchase agreement, the seller informed him that another offer came in and that the seller had accepted it. 

In Connecticut, in order for a real estate purchase contract to be considered valid, the following things must occur:

1. Buyer has to sign contract.
2. Buyer has to offer some consideration – a deposit.
3. Seller has to sign the contract.
4. Seller has to return the signed contract to the buyer so buyer can see that the contract has been signed.

Buyers and sellers, if all four of these conditions are not been met, you do not have a contract. 

If 1-3 have occurred, and then the seller changes his/her mind before sending the contract to the buyer, then there is no contract.  After receiving an offer and before signing it and sending it back to the buyer, a seller can shop a buyer’s offer -meaning a seller can use a buyer’s offer to get other, better offers. 

Even if the seller drafts the contract and sends it to the buyer to sign, but the buyer hasn’t actually signed it or given a deposit, there is still no contract if the seller has decided to sell to someone else.

Please note that this post relates to all counties in Connecticut except Fairfield County.  Also, I am not an attorney and my understanding of real estate contract law is based on my experience as a real estate agent.  Please consult with an attorney before making any decisions.