To Be Enforceable, Agreements to Buy and Sell Real Estate Must Be Written

Many times family members, friends or even complete strangers enter into verbal agreements to sell real estate. Whether this is done to preserve informality, further the "trust me" relationship, or simply to save money on attorneys' fees or recording costs, it is a BAD IDEA.

A Texas law known as the "Statute of Frauds" requires agreements to purchase or sell real estate to be WRITTEN. Otherwise, such agreements are unenforceable.

The Texas Statute of Frauds -- every state has one -- is located at Chapter 26 of the Texas Business and Commerce Code. It provides that a promise, agreement for the sale of real estate is not enforceable unless the promise or agreement, or a memorandum of it, is

(1) in writing; and

(2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.

Frequently, disagreements arise over the terms of oral real estate sales contracts. When these disagreements rise to the level of legal disputes, both parties often end-up losing because the Statute of Frauds generally prevents Court enforcement of non-written agreements to buy or sell real estate.

If you are buying or selling real estate in Texas, you should consult a knowledgeable lawyer, and know that the transactional fees spent up-front could save you many times that amount later.