Dear Realtor – The Contract: More than Words

Dear Realtor,

HELP!!!! I really do not understand what the big deal is – I only signed a piece of paper, and I changed my mind. My agent took me out to view multiple properties. I fell in love, and we drew up the contracts (a firm and unconditional offer). I really thought I wanted it and it felt right. But…later that day, I got cold feet and changed my mind. Not a big deal. I did not drop off the bank draft or anything. I only signed the paperwork.


Not a big deal. I did not drop off the bank draft or anything. I only signed the paperwork.


Now everyone is really very mad and saying that I am “contractually obligated.” I thought there needed to be ‘consideration’ for the whole thing to be binding. And, as I said, I did not drop off the cheque. My agent said she could try to get a ‘mutual release.’ What the heck is that?? Is there a problem here??? What is the big deal?! It’s only paper!!!!

Signed, Indecisive or In Hot Water??

 

 


A handshake is one thing; a signed contract is more binding than you think

 

 

Dear Indecisive or In Hot Water,

At this point, you might be both. The big deal is that, yes, it’s only paper. But…what you signed on that paper (actually, a contract) is  legally binding. Then, you submitted that contract to a seller to review. Did you understand that what you were signing and submitting were firm and binding contracts? Were you aware that the tiny printed seal on the signing page is considered ‘consideration’? By signing a contact under seal, without conditions, you are submitting a firm and binding offer for someone else to accept /reject/counter.

At that point, it is no longer within your control to change your mind. They may take pity on you and offer a mutual release, if they do not want to move forward with someone who is no longer wanting to complete the transaction. They might decide to cut their losses early without wasting time. Or, they could hold you legally responsible to the terms of the contract you submitted to them, and additionally, sue you for losses or damages caused by your actions. It is much more serious than you think.


Sometimes, when buying or leasing a property, the paperwork can seem like a simple formality. In fact, they are very serious terms and conditions that hold everyone involved as strictly responsible to fulfil their obligations.


As these transactions become more common, it is understandably easy to lose connection to the seriousness of these contracts and the obligations and promises held within. It is always your right to slow down and take your time.

Carefully consider what you are signing. Make sure you clearly understand all the terms and conditions that you are committing to before you submit your offer to be reviewed. Once it is out of your hands and in the world, you are bound by those commitments.

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