In Texas, when does a real estate contract become binding?
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When the buyer signs
The buyer's signature alone doesn't create a binding contract because mutual assent requires both parties to agree. The seller hasn't accepted the terms yet, so no contract exists.
When the seller signs
The seller's signature alone doesn't create a binding contract because the buyer hasn't accepted the seller's terms. Without both parties agreeing, there's no mutual assent.
When both parties have signed and one party has communicated acceptance
When earnest money is deposited
Earnest money deposit doesn't create a binding contract. It's evidence of the buyer's good faith but doesn't substitute for the required mutual assent between buyer and seller.
Why is this correct?
A contract becomes binding when both parties have signed and acceptance has been communicated because this demonstrates mutual assent and completes the offer-acceptance cycle. Both signatures alone don't guarantee the other party knows about the agreement, and communication confirms the contract is effective.
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