Contracts
A Michigan purchase agreement becomes binding at the moment:
AThe buyer's agent presents the offer
BThe seller's acceptance is communicated back to the buyer or buyer's agent✓ Correct
CThe earnest money is deposited in escrow
DBoth parties meet in person to sign
Explanation
A binding contract in Michigan is formed when the seller's acceptance is communicated to the buyer (or their agent). Acceptance alone without communication does not create a contract — the offeror must receive notice of acceptance.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
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