If a real estate broker from 1900 were to be transported to our current time and asked to fill out a real estate sales agreement, it is very likely that the broker from 1900 would be stunned beyond belief. There are many “old timers” who talk about how sad it is that we can’t do business with a handshake or with a simple agreement of sale. The truth is we can’t do business that way because people have demonstrated their inability to do so successfully.
In a perfect world, if a buyer and seller were willing to conduct a sale of real estate on the basis of a handshake, they could certainly do so. The law does not require a written agreement to consummate a real estate transaction. If both parties proceed without objection and without later claiming a breach, they have not violated any law.
However, if a deal goes south, it is important for buyers and sellers to understand very clearly that oral agreements to sell real estate are not enforceable. A handshake to sell real estate where either the buyer or seller decides they don’t want to complete the transaction leaves the other party in the lurch. There is no enforceable contract unless it is written.
As far as the number of pages and details in modern real estate sales agreements, it is important to understand that, although drafted by lawyers, these long agreements are the result of both statutes and bitter experience.
So, the next time your lawyer or real estate salesperson hands you a long sales agreement to review, don’t get mad at the lawyer or real estate salesperson. The reason the agreement is so long is because the experience of many people before you have required that this agreement be used.