Contracts
When a seller accepts a buyer's offer, a contract is formed at the moment of:
AThe buyer submitting the offer
BThe seller signing the acceptance
CCommunication of the seller's acceptance to the buyer✓ Correct
DRecording of the purchase contract
Explanation
A binding contract is formed when the offeree's acceptance is communicated back to the offeror. Merely signing the acceptance is not enough—the buyer must be notified of the acceptance for a valid contract to exist.
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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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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