What does 'Ratified Contract' Mean?

By
Real Estate Agent with Momentum Realty

What does 'Ratified Contract' Mean?

Dear Holly,

We have had our house listed for sale and last week we got a contract. We are waiting to hear back about the Home Inspection right now. Every time I speak with my Realtor® she calls our contract a 'Ratified Contract.' What does this mean? What is the difference between a 'Contract' and a 'Ratified Contract?'

Confused in Northern Virginia

Dear Confused,

Like every other field, Real Estate is a discipline that has its own language. All Realtors® know the lingo, but we forget that not every one understands our 'Realtor® Speak.'

What you received last week was an Offer. After discussing the Offer with your Realtor, you most likely Countered (went back to them with YOUR Offer).  This cycle can go back and forth until the two parties reach agreement.  This is how your sales contract ends up with scratched out terms and initials. Each time a party Counters, they are essentially making a brand new Offer. Once the parties have agreed on the terms of the contract, and all changes are initialed and all blanks are initialed and/or signed, you have what is called Ratified Contract--a contract to purchase your home at terms agreeable to all parties.

A Ratified Contract will likely still  have Contingencies...but that is a post that I covered yesterday, 
  What is the big rush to clear the contingencies?

I hope this helps!

Holly

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I believe that buying or selling real estate should be a GREAT EXPERIENCE. If I can help you, your friends or family buy or sell their next home in Northern Virginia, please let me know!

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Rainmaker
992,818
James Dray
Wise Custom Realty - Bentonville, AR
AR., MO., or OK. I can find the home for you.

Each group of people have their own language.  We do not speak the same as you would lets say in the military, law enforcement, firefighters, etc.  Interesting on how that plays out.

Apr 14, 2011 07:14 AM #1
Rainer
76,037
Vance Booher
Howard Hanna Real Estate Services, SRES - Greensburg, PA

Morning Holly.  Here we usually call it an Executed Contract.  And yes they surely can look a mess after repeated scratchings and initialings.  I know that a lot of areas are now using online/electronic signatures and modifications and that certainly cleans things up.  Unfortunately many places still don't recognize the validity of such signatures - they are firmly locked into the past.

Apr 14, 2011 07:18 AM #2
Rainmaker
826,718
Richard Weeks
Waller Group - Dallas, TX
Realtor, Associate Broker - Manager Business Development

Don't know anyone in Texas that uses the term "ratified".  Most agents here say we have an executed contract which is not really executed until all the terms and conditions have been met.

Apr 14, 2011 07:20 AM #3
Rainmaker
543,193
Holly Weatherwax
Momentum Realty - Reston, VA
Moving Your Dreams Forward...

As we all know, Real Estate is LOCAL. Not only are market condtions local, but 'Real Estate Speak' is too!

Apr 14, 2011 07:54 AM #4
Ambassador
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Ellie McIntire
Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD
CDPE, Howard County Homes for Sale

I love this series Holly. Keep it up. Expect to see them re-blogged on my blog very soon :)

Apr 14, 2011 08:06 AM #5
Rainmaker
573,802
Phil Leng
Keller Williams Eastside Market Center - Kirkland, WA
Phil Leng Team - Residential Real Estate Experts &

Hi Holly,

So a RATified contract has nothing at all to do with rats?

I thought maybe after the inspection, a pest report was ordered, the rats were all removed and the contract was RATified!

:)

Phil

Apr 14, 2011 08:11 AM #6
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Craig Rutman
Helping people in transition - Cary, NC
Raleigh, Cary, Apex area Realtor

Love the "Dear Confused" series Holly. Keep 'em coming. They're just the right information/ answers the public needs!

Apr 14, 2011 08:48 AM #7
Rainmaker
1,266,720
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Nice post.  I have been meaning to do a series on basic real estate terms.  Thanks for the prompt.

Apr 14, 2011 01:01 PM #8
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2,416,676
Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Holly, you are so right.  Like many professions, we have our own language.  And our clients are not always bilingual!

Apr 23, 2011 10:20 AM #9
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

 

Hey, Holly!

I included this post in today's Last Week's Favorites! 

Cheers!

Pat

Apr 24, 2011 10:53 AM #10
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1,853,690
Jeff Dowler CRS
Solutions Real Estate - Carlsbad, CA
Carlsbad CA Homes for Sale (760) 840-1360

Holly

A short, simple and easy explanation. We tend to call them executed contracts here. Our Offer to Purchase further states that a bindng contract is formed when a signed copy of the seller(s) acceptance is received by the buyer or the buyer's authorized agent.

Jeff

Apr 24, 2011 11:46 PM #11
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294,355
Linda K. Mayer
License # 01767321 - La Verne, CA
Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST

Easy explaination for clients.  hanks, Holly!

Apr 27, 2011 01:30 PM #12
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Rainmaker
543,193

Holly Weatherwax

Moving Your Dreams Forward...
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