An affiliate broker in Tennessee represents a buyer who submits an offer on a property. The listing broker calls the affiliate broker and says, 'The seller loves the offer but wants to close in 45 days instead of 30 days — everything else is fine.' The listing broker adds, 'Consider this a verbal acceptance with that one change.' The affiliate broker tells the buyer, who agrees verbally. No written document reflecting the change is signed. Which of the following is the most accurate statement about this situation?
Correct Answer
B) No enforceable contract exists because real estate contracts in Tennessee must be in writing to satisfy the Statute of Frauds
Under Tennessee's Statute of Frauds (Tenn. Code Ann. § 29-2-101), contracts for the sale of real property must be in writing and signed by the party to be charged to be enforceable. A verbal modification of a material term — such as the closing date — is not enforceable in a real estate transaction. Because the seller's 'acceptance' included a material change (closing date) that was never reduced to writing and signed, no enforceable contract exists. Both parties should execute a written agreement reflecting the agreed terms.
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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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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
- → In Rhode Island, a licensee submits a written purchase or lease offer to an owner. Which statement is correct?
- → A Rhode Island salesperson asks about a listing agreement or contract for sale is prepared. What is the best answer?
- → Which Rhode Island rule applies when a listing agreement lists property with a multiple listing service?
- → A Rhode Island licensee encounters a listing agreement lets the principal broker retain a portion of deposit money upon buyer default. What should the licensee remember?
- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
- → A Hawaii broker asks a salesperson about a deed or lease is not recorded. Which answer follows Hawaii law?
- → For the Hawaii salesperson state portion, interest accrues on a trust-account deposit. Which statement is correct?
- → In a Hawaii real estate transaction, trust funds are placed with a neutral escrow depository for Hawaii property. What should the licensee remember?
- → For the Hawaii salesperson state portion, a licensee secures a party signature on a Hawaii listing or purchase contract. Which statement is correct?
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