Learning Center > Making an Offer > Establishing an Agreement

Establishing an Agreement

 Email a link to this page
print this page Print this page

In the United States, oral agreements to purchase real estate are not enforceable. Therefore, every real estate transaction must be based on a written contract. In Pennsylvania, this contract is typically known as an Agreement of Sale or, less often, a Contract of Sale. A legally binding Agreement of Sale is established through the process of offer and acceptance. The buyer makes an offer to purchase by submitting a detailed Agreement of Sale to the seller, accompanied by a deposit. There is no preliminary "proposal" or "bid" process, as there is in some other states. So, even if the buyer gives their agent permission to bargain on their behalf, the agent must have an Agreement, signed by the buyer and accompanied by a deposit, in order to present an "offer" that the seller can accept. If the seller agrees with the terms of the Agreement as submitted on the buyer's behalf, the seller signs it, and it becomes a legally binding document - the deal is on! If the seller rejects the buyer's proposed Agreement entirely the offer is void, and of no further effect. The seller can then submit a counter-offer, with terms the seller prefers, which the buyer is then free to accept, or the buyer can submit a different offer to the seller. The key is that both buyer and seller must agree on all terms before a binding Agreement is formed.