A Colorado buyer submitted an offer using the CREC Contract to Buy and Sell Real Estate. The seller made a counteroffer changing the price and closing date. The buyer's broker verbally told the seller's broker that the buyer accepted the counter. Before anything was signed, the seller accepted a higher offer from another buyer. Is there an enforceable contract with the first buyer?
Correct Answer
C) No, because real estate contracts in Colorado must be in writing and signed to be enforceable under the Statute of Frauds
Under Colorado's Statute of Frauds, contracts for the sale of real estate must be in writing and signed by the party to be charged to be enforceable. A verbal acceptance of a counteroffer — even communicated by a broker — does not create an enforceable real estate contract. Until the buyer signs the counteroffer in writing, no binding contract exists.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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