Top 10 Contract Questions
If you’re like most REALTORS in Ohio, you have had a busy summer negotiating offers and contracts for your clients. While the turnaround in the market has been great, along with that often comes issues regarding how to handle offers and some disputes between the parties to those contracts. Here are ten of the most frequently asked questions on contracts that we receive on the Legal Assistance Hotline…
1. If a contract to purchase does not specify a closing date, is the contract void?
A: No. If a contract doesn’t specify a date or time of performance, the court will imply a reasonable time.
2. Do you have to present a verbal offer to purchase to a seller?
A: Yes, you are obligated to present all offers to purchase to the seller. While you should certainly attempt to persuade the prospective purchaser to reduce the offer to writing, if he/she refuses, the offer should still be presented to the seller. However if the offer is accepted, the contract will not be binding or enforceable until it is in writing and signed.
3. If there is a contract to purchase pending do you have to present a subsequent offer to purchase that is received?
A: Yes. Unless you are instructed otherwise by the seller, all offers must be presented until the date of closing. Of course any such subsequent offer should only be accepted by the seller as a back-up contract.
4. If a home does not appraise for the purchase price can the buyer automatically get out of the contract?
A: Clearly the buyer will be able to do so if the contract was contingent upon the home appraising for the purchase price. If not, the only other grounds for the buyer to get out of the contract will be if the contract was contingent on the buyer obtaining a specific amount of financing and the buyer cannot obtain that financing due to the low appraisal.
5. The seller has received a full price offer on his property. However, he is refusing to accept this offer and says he wants to make a counteroffer for more than the asking price. Can the seller refuse a full price offer and “counter” for more than the listed price?
A: Yes. The seller is not legally required to accept an offer because it is “full price” and he can counter for more than the listed price. However, the listing broker could bring a claim against the seller for his commission based upon the theory that the broker has produced a ready, willing and able buyer on the terms provided for in the listing contract.
6. On a listing submitted to MLS several appliances were checked as staying with the property. A contract to purchase was subsequently negotiated and closed. When the sellers moved out, they took the appliances listed in the MLS, claiming that because the purchase contract did not provide that the appliances stayed, they did not have to leave them. The buyers thought they would stay because they were listed in the MLS. Who is right?
A: The sellers are. Although the appliances may have been listed in the MLS, the purchase contract is the legal document that controls the terms of sale between the buyers and sellers. Unless the appliances were listed in the purchase contract, the sellers were free to take them.
7. Can a “back-up” buyer get out of a back-up contract at any time if they find another property?
A: No. A back-up buyer is bound by the terms of the back-up contract. If the buyer wants the ability to terminate the contract if they find another home they would need to include this provision in the terms of the back-up contract.
8. If a seller rejects an offer to purchase must the seller indicate “rejected” on the face of the offer?
A: No. A seller can verbally reject an offer. However, it is best that the rejection is marked on the offer so there is no question that the offer was presented and that it was rejected.
9. Is earnest money required to have a legally binding contract?
A: No, earnest money is not required under Ohio law to have a binding contract
10. Is a buyer legally entitled to a “walk-through” before closing?
A: No. Ohio law does not provide the buyer with a legal right to a walk-through. If the buyer wants a walk-through prior to closing the buyer should include this in the terms of the purchase contract.
By Peg Ritenour, OAR Vice President of Legal Services/Administration – See more at: http://ohiorealtors.org/2014/08/11/oar-legal-hotlines-top-10-contract-questions/#sthash.Y6CHvwJq.