Greiner Law Corp.

Close this search box.

The Process and Importance of Ratifying Contracts in Real Estate


In real estate, what is a ratified contract in real estate might be your first question when diving into property transactions. In simple terms:

  • A ratified contract is a legally binding agreement.
  • It signifies that all parties have agreed to the terms.
  • It plays a crucial role in the home buying process.

Understanding the importance of a ratified contract is essential for any real estate transaction. It ensures clarity, protects your interests, and keeps the deal legally binding. Whether you’re buying or selling, knowing the contract is ratified offers peace of mind and legal security.

Steps in Ratifying a Contract - what is a ratified contract in real estate infographic infographic-line-3-steps

What is a Ratified Contract in Real Estate?

A ratified contract in real estate is a legally binding agreement between the buyer and seller. It means both parties have agreed to all terms and signed the contract. This step is crucial in the home buying process, making the deal enforceable by law.

Key Steps in Ratifying a Contract

The process of ratifying a contract involves several important steps:

  1. Offer Acceptance:

    • The buyer submits a written offer outlining the terms of the purchase.
    • The seller can accept, reject, or counter the offer.
  2. Counteroffer:

    • If the seller counters, the buyer must review and agree to the new terms.
    • Negotiations may continue until both parties reach an agreement.
  3. Signatures:

    • Once all terms are agreed upon, both the buyer and seller sign the contract.
    • The date of the last signature marks the official ratification date.
  4. Formal Execution:

    • The signed contract is then distributed to all relevant parties, such as real estate agents and title companies.
    • This ensures everyone is on the same page and aware of the agreed terms.

Importance of a Ratified Contract

A ratified contract is essential for several reasons:

  • Legal Protection:

    • Once ratified, the contract is legally binding. This means if either party fails to meet their obligations, the other can take legal action.
  • Clarity:

    • A ratified contract clearly outlines all terms, including the purchase price, closing date, and contingencies. This prevents misunderstandings and disputes.
  • Enforceability:

    • Because the contract is legally enforceable, it provides security to both parties. They can be confident that the agreed terms will be honored.
  • Deadlines:

    • The ratified contract sets important deadlines for inspections, mortgage approval, and other contingencies. Meeting these deadlines is crucial to keeping the transaction on track.
  • Contingencies:

    • Contingencies are conditions that must be met for the sale to proceed. Common contingencies include home inspections and financing approval. If these conditions aren’t met, the contract can be voided without penalty.

By understanding these key steps and the importance of a ratified contract, both buyers and sellers can navigate the real estate process with confidence and legal assurance.

Steps After Contract Ratification

Once a contract is ratified, the real estate transaction is far from over. Several critical steps must be taken to ensure the deal progresses smoothly. Let’s break down these steps.

Earnest Money Deposit

The earnest money deposit is the buyer’s way of showing they are serious about purchasing the property. This deposit is made after the contract is ratified and serves as a financial commitment.

  • Confirmation of Intent: The deposit demonstrates the buyer’s intent to follow through with the purchase.
  • Buyer’s Commitment: If the buyer backs out without a valid reason, they may forfeit this money.


Inspections are vital to uncover any hidden issues with the property. Different types of inspections might be required:

  • Home Inspection: Checks the overall condition of the property.
  • Pest Inspection: Identifies any pest infestations.
  • Radon Inspection: Measures radon levels to ensure they are safe.
  • Septic Inspection: Evaluates the septic system’s condition.
  • Well Inspection: Assesses the water quality and well structure.

Buyers should schedule these inspections promptly and review the results with their real estate agent to decide on any repair requests.

Loan Application and Commitment

Securing financing is a crucial step:

  • Formal Application: The buyer must formally apply for a loan with their chosen lender.
  • Lender Commitment: Once the lender is satisfied with the application, they issue a commitment letter.
  • Pre-Approval: This letter is often required to move forward with the purchase.

Home Appraisal

An appraisal is necessary for the lender to confirm the property’s value:

  • Property Value Assessment: A professional appraiser evaluates the home to determine its market value.
  • Lender Requirement: Most lenders require this to ensure the loan amount aligns with the property’s value.

Settlement Agent and HOA Paperwork

Legal and administrative tasks are essential to finalize the transaction:

  • Settlement Agent: Choose an attorney or settlement agent to handle the closing paperwork.
  • HOA Requirements: If the property is in a community with a homeowners association, review any HOA paperwork to understand additional rules or fees.

Homeowners Insurance

Setting up homeowners insurance early is crucial:

  • Early Setup: Start this process as soon as possible to avoid delays.
  • Property Inspection: Some insurers may require an inspection before issuing a policy.

By following these steps diligently, buyers can ensure a smooth transition from contract ratification to closing. Each step plays a critical role in safeguarding the buyer’s investment and ensuring all legal and financial requirements are met.

Common Issues and Solutions in Contract Ratification

Voidable Contracts

A voidable contract is one that can be canceled or altered due to specific legal reasons. Here are some common scenarios:

  • Failure to Disclose a Material Fact: If one party didn’t share important information, the contract might be voidable.
  • Mistake, Misrepresentation, or Fraud: Any incorrect or deceitful information can make the contract voidable.
  • Undue Influence or Duress: If someone was pressured into signing the contract, it may not be enforceable.
  • Legal Incapacity: For example, if one party is a minor or mentally incapable, the contract can be voided.
  • Unconscionable Terms: If the terms are extremely unfair to one party.
  • Breach of Contract: If one party fails to meet their obligations.

Example: Imagine a teenager signing a lease. Since they’re underage, the lease is voidable. They (or their guardian) can choose to cancel it.

Ratification Process: To fix a voidable contract, all parties must agree to new terms that address the issues. This is called ratification. Once the problematic terms are corrected, the contract becomes valid.

Amendments and Changes

Contracts often need adjustments. This is where amendments come in. If both parties agree to changes, they can modify the contract terms.

  • Mutual Agreement: Both parties must agree to the changes.
  • Legal Documentation: The changes should be documented in writing and signed by both parties.

Example: If a buyer and seller agree to extend the closing date, they must both sign an amendment reflecting this change.

Vicarious Liability and Disaffirmance

Vicarious Liability occurs when one party is held responsible for the actions of another. In real estate, this often involves employees.

  • Employee Actions: If an employee makes a decision without authority, the employer can later ratify or reject that decision.

Example: An employee hires a contractor without permission. If the employer starts paying the contractor, they’ve ratified the agreement. If they refuse, the contract is voided.

Disaffirmance is when a party renounces a contract, usually because they lacked the legal capacity to enter into it initially.

  • Renouncing Contracts: A minor can disaffirm a contract upon reaching adulthood if they choose not to honor it.

Example: A minor who buys a car can disaffirm the purchase once they turn 18 if they no longer want the car.

Understanding these common issues can help parties navigate the complexities of contract ratification more effectively. By addressing potential problems early, you can ensure smoother real estate transactions.

real estate contract - what is a ratified contract in real estate

Frequently Asked Questions about Ratified Contracts in Real Estate

What does it mean when a contract is ratified?

When a contract is ratified, it means that all parties involved have formally agreed to its terms and conditions. This agreement is signified by their signatures on the document. Once ratified, the contract becomes legally enforceable, meaning it can be upheld in a court of law if necessary.

For example, in real estate, a ratified contract indicates that the buyer and seller have agreed on the sale price, closing date, and any contingencies like home inspections or financing. This formal agreement provides clarity and legal protection for both parties.

Is a purchase agreement the same as a ratified contract?

A purchase agreement becomes a ratified contract once it is signed by both the buyer and the seller. The delivery date, or the date when the last party signs the contract, is crucial because it marks the start of all deadlines and contingencies stipulated in the agreement.

Example: If a buyer makes an offer on a house and the seller accepts it, the purchase agreement is then signed by both parties. At this point, it becomes a ratified contract, and all the terms within it become legally binding.

Can a ratified contract be cancelled?

Yes, a ratified contract can be cancelled, but there are specific conditions under which this can happen. Contingencies are often built into the contract to allow for cancellation without penalty. Common contingencies include:

  • Financing Contingency: If the buyer cannot secure a loan, they can cancel the contract.
  • Inspection Contingency: If the home inspection reveals significant issues, the buyer can walk away.
  • Appraisal Contingency: If the property appraises for less than the purchase price, the buyer can cancel the deal.

If these conditions are not met, the contract can be terminated, and the earnest money deposit is usually returned to the buyer.

Understanding these aspects of ratified contracts can help you navigate real estate transactions more confidently.


In summary, ratifying a contract in real estate is a crucial step that transforms a proposal into a legally binding agreement. This process ensures that both the buyer and the seller are committed to the terms outlined, such as price, closing date, and contingencies. Ratified contracts offer legal protection, clarity, and enforceability, making them essential for smooth real estate transactions.

At Greiner Law Corp, we understand the importance of a well-structured contract. Our expertise in real estate law allows us to guide you through every step of the ratification process, ensuring that your interests are protected and your goals are met.

Client Goals: We prioritize understanding your unique needs, whether you are buying or selling. Our tailored approach ensures that your transaction aligns with your objectives, providing peace of mind and a seamless experience.

Business-Minded Approach: We focus on practical solutions and efficient processes. Our goal is to make real estate transactions as straightforward as possible, meeting all legal requirements without unnecessary complications.

In conclusion, a ratified contract is more than just a piece of paper—it’s a foundation for your future security and success in real estate. With the right guidance and expert legal support from Greiner Law Corp, you can navigate this complex process with confidence. Let us help you build that solid foundation with the precision and care you deserve.

For more information and expert legal support, visit our Real Estate Law Services.


For more information Call:


Reach Out Now


Recent Blog Posts:

related posts