Are verbal real estate contracts enforceable? This question is frequently asked by homeowners and investors alike. While many states require that a contract be in writing, some don't. In such cases, you should consult your state's laws. In some cases, verbal contracts are legally binding, but there are still many ambiguities surrounding their enforceability. This article will look at some of these common pitfalls and offer tips to avoid them.
First, most people think that there's a "cooling-off" period after signing a real estate contract. In fact, this time period only applies to certain types of contracts. Goods and services that are ongoing or sold at home may have a three-day cooling-off period, but the service or product must be worth more than $25 to qualify. Furthermore, you can't renege on an agreement just because it was verbal. Verbal agreements are not enforceable unless they are in writing.
Even if the contract was made on the spot, there is no legal obligation to stick to the terms. In some situations, the parties may decide to move in without the agreement or back out later. The same rule applies to brokerage agreements. You might think that a handshake agreement is unenforceable, but it's unlikely. The law protects both parties from exploitation of misrepresentation. Therefore, it's vital to follow state laws when establishing a verbal real estate contract.
The majority of real estate transactions involve verbal agreements. If the agreement is for a period less than a year, it's best to get it in writing. If you don't, it could lead to multiple issues. If you cannot agree on the terms, it's important to seek legal advice before making any final decisions. It's important to be clear about what your contract says because even a seemingly unenforceable contract can cause havoc if it's challenged later on.