“After a seller accepts a buyer’s offer to purchase a property, it’s time to make it official, in the form of a real estate contract. This document is one of the most important steps in the home-buying process, as it clears the way for both parties to begin the transfer of property. It means that the sellers can begin planning to move out, while the buyers can work with their agent, lender, and attorney get their ducks in a row for closing.
“But at what point are both parties actually locked into the contract?
“In general, an offer becomes a contract when both parties have signed,” says Phil Lunnon, a Realtor® with Lunnon Realty in Lakewood, CO. Once this happens, the contract is binding for both the seller and buyer.
“Of course, just how binding the contract is depends on the details of the contract itself. Some contracts may have contingencies—or outs—built in. Typically a buyer’s attorney will try to build as many contingencies as possible into a contract to keep the client from being tied down if something unexpected comes up. A seller’s attorney, on the other hand, will typically advocate for as few contingencies as possible, because the client doesn’t want the buyer walking away from the deal.”
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