by Thomas R. Miller
Legal Information Officer
In recent months, I have been asked several interesting questions concerning the acceptance of offers to purchase real estate. The following questions are representative of the most common inquiries.
Q. I am a licensed real estate broker in North Carolina. Not long ago, I received a written offer to purchase one of my listings. Naturally, I rushed to present the offer to the seller. He accepted the offer and I returned to my office with the signed contract. When I got there, I was astonished to discover that another offer to purchase the same property had been received, and for a price higher than the offer I had just presented. Since the seller has already signed and accepted the first offer, is it now too late for him to consider the second, higher offer?
A. No. The seller may consider and accept the second offer if he so desires. To create a legally binding contract for the purchase and sale of real estate, the written offer must be accepted and signed, and the acceptance must be communicated to the offeror. Although the seller in question had assented to and signed the first offer presented by the broker, he is not contractually bound to sell because the broker has not communicated the seller's acceptance to the first offeror.
Unless otherwise specified, the acceptance may be communicated by any means adequate to manifest the accepting party's assent. To communicate the acceptance of an offer to purchase real estate, it is not necessary for the broker to return the offer bearing the seller's signature to the buyer. Once the seller has accepted and signed the contract, a letter, telegram or telephone call to the buyer will be sufficient to communicate the acceptance and bind the parties. Of course, even though the acceptance is communicated by mail or telephone, Commission Rule .0106 require the broker to supply both parties a copy of the contract within five days =r it is executed.
Since he has not communicated his seller's acceptance to the first offeror, the broker in the question should return both offers to the seller so that he may consider their relative merits and choose between them.
Q. I am a licensed North Carolina real estate broker. One of the houses I have listed is owned by a seller who lives in California. When I received an offer to purchase the house, I called the seller in California and read him the important provisions. After considering the offer briefly, the seller accepted it over the telephone. I then immediately informed the offeror and I mailed the offer to California for the seller's signature. When I returned from the post office, my secretary informed me that another written offer to purchase the same property at a higher price had been received. Since I already have informed the first offeror that his offer was accepted, may the seller withdraw his verbal acceptance of the first offer in order to consider and possibly accept the second, higher offer?
A. Yes. Although the broker has communicated the seller's verbal acceptance to the first offeror, the seller is not bound and may consider and accept the second offer. To create a binding contract for the purchase and sale of real estate in North Carolina, the Statute of Frauds, G.S. 22-2, requires the contract to be in writing and signed by the party to be charged. Because the seller has not yet signed the first written offer, the communication of his verbal acceptance of the offer is insufficient to create a contract which can be enforced against him. The broker should contact the seller immediately to inform him that two offers are being sent for his consideration and that he may accept either or reject both. If the seller rejects the first offer, the broker in the question will be faced with the unenviable task of explaining to the first offeror that his offer was not accepted as he had been informed previously, but rejected by the seller.
[CAVEAT: Unless the written offer has been signed by the accepting party, real estate brokers and salesmen should not represent to the person who made the offer that his offer has been accepted.]