Real Estate Contract by Text Message? Are You Kidding?

Realtors negotiating price back and forth by text message may find themselves with some unhappy clients if not a lawsuit. The general rule in real estate is that all contracts for the sale of real estate must be in writing. Licensed realtors typically use electronic forms that quickly and easily allow a buyer or seller to make an offer, counteroffer and acceptance. All done over the Internet with electronic signatures.

While these electronic forms may be easy to use and efficient, text and email are still faster especially when the only issue left is price. It is not uncommon for a formal offer to be made only to expire but then a counter is received by text or email. Offers have been “accepted” by text message and by the time the formal agreement is sent by Internet, a better offer is made. Are the text messages a binding contract? What if the realtor’s client asked the realtor to make a counteroffer and the realtor sent a text or email first? You know, just to save the time of a “formal” counteroffer should it be unacceptable. Has the realtor violated a duty to his or her client?

If you are looking for a clear answer, I don’t have one. Whether or not there is a binding contract depends upon the facts and circumstances of each case. When a client requests a realtor to make a counteroffer and does not explicitly authorize an informal text or email, the realtor is exposed to potential liability. Either the buyer or seller is not going to be happy. Deleting the text or email just makes it worse.

Typically, the listing broker and certainly the seller believe texts and emails are not binding. A common occurrence is for the listing broker to play one text offer off another driving up the price without having any formal obligation to accept any particular offer.

Buyers, sellers and realtors would be well advised to address the issue of text and email up front starting in the listing contract and making it very clear that there is no agreement until the official electronic forms are properly executed. Realtors would be well advised to get it in writing whether texting a nonbinding offer or acceptance is permissible and to always reconfirm before using text or email.