Handshake Deal are they binding?
Is handshake deal binding contract? Well that all depends as to what it is you shook hands on. If we are talking about the real estate transactions chances are it is not. Keep reading as this is something that happens all the time. Let me explain as to why! My name is Leonard Woshczyn and I am a local North Miami Realtor, I am not an attorney so please consult a real estate attorney for legal matters you can contact HERE. But what I do want is to make buyers and sellers be aware as to how real estate transaction is done correctly.
Few weeks ago I had a showing with one of my buyers that fell in love with this property. Owners happened to be home at the time of the showing and we had a handshake deal as to the price and the terms right there on the spot. I anticipated that my buyer would like this property so I had a written offer that just needed the terms filled out with me and we filled it out on the spot. we where told by sellers agent that buyer would need to review the offer with their attorney, which is not an unusual thing to do, and I do it all the time with my customers as well.
North Miami is one of those places where things are done a bit different compared to some other areas of the country. We have a lot of high rise condos and things are not the same when you are dealing with condos as compared to single family homes. The concentration of condos and townhomes as compared to single family homes is more than 10:1 and every condo has it own rules. So the bottom line as realtors we are not allowed to give legal advise so I usually have attorney review all the paperwork to make sure we are in compliance.
Buyers Think We have a Deal
So my buyers are excited, they are talking all the things they want to do to the unit etc. Do you think we have a deal? Well my answer is usually very simple. When it comes to real estate transactions or agreement of sale, the offer is just an offer regardless what you have verbally agreed to or shook your hands on. It has to be signed by all parties involved in order for it to be a binding contract that outlines all the details of the transaction.
Because of the statute of frauds, the rules state that any real estate agreements of sale between buyer and sellers must be signed by all parties in order for it to be binding. Which by the way has not been signed by seller as of yet. So needless to say my buyers are upset and so on. But legally as I mentioned before we do not have an agreement since not all parties have signed the offer.
So what are our options one may ask. Well for starters I will try to find out what is the reason for the delay. Usually the agreement of sale outlines all the info of the deal. There are also addendum’s to the agreement that highlight other things involved in the transaction, like condo documents review by the buyer, mortgage contingencies, inspection period etc. Maybe after reviewing the offer sellers had second thought s as to what they verbally agreed to, and now do not feel comfortable with the deal.
When it comes to real estate agents are not only dealing with property that is being sold or bought, we are also working with peoples emotions and even psychology. Sellers do have a emotional attachment to their home and it is different for every seller. Their kids grew up in the house, they have vacationed here for the last 20 some years and so on, the list is very long. Trying to separate emotional attachment to simply making a deal is hard. Same goes for the buyers, they finally found a property they love. Their kids are starting school and they need to get in before it starts. Or they simply just fell in love with the view or the place.
Hand Shake Deals are Not Binding
I will update you on the results of this in my next post. For now just a few pointers. There are over 30,000 agents in Miami-Dade County and unfortunately not all are equal in knowledge and experience. I truly believe that all agents are trying to help their buyer or seller in the process of buying and or selling but sometimes I come to question what and how they do it.
Anyway I will let it go at this. Should you have a question please do not hesitate to call you of the real estate attorneys I mentioned, you can find them HERE. Also if you are in the market to buy or thinking of selling or just have a question you may reach me direct at 786-505-4786. I specialize in North Miami area more specific Sunny Isles Beach, Bal Harbour, Surfside, Aventura, Golden Beach, Hallandale and Hollywood area. You can see all the areas that we cover HERE.