What does 'Ratified Contract' Mean?

By
Real Estate Agent with The Momentum Group

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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Comments 12 New Comment

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Rainmaker
947,927
James Dray
AR., MO., or OK. I can find the home for you.
Wise Custom Realty

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.

April 14, 2011 07:14 AM
Rainmaker
75,424
Vance Booher
Howard Hanna Real Estate Services, SRES

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.

April 14, 2011 07:18 AM
Rainmaker
776,333
Richard Weeks
Realtor, Associate Broker - Manager Business Development
Waller Group

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.

April 14, 2011 07:20 AM
Rainmaker
538,006
Holly Weatherwax
Keller Williams Realty, Northern Virginia
The Momentum Group

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

April 14, 2011 07:54 AM
Ambassador
1,061,934
Ellie McIntire
CDPE, Howard County Homes for Sale
Ellicott City Clarksville Howard County Maryland Real Estate

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

April 14, 2011 08:06 AM
Rainmaker
572,328
Phil Leng
Phil Leng Team - Residential Real Estate Experts &
Keller Williams Eastside Market Center

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

April 14, 2011 08:11 AM
Ambassador
984,735
Craig Rutman
Raleigh, Cary, Apex area Realtor
Helping people in transition

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

April 14, 2011 08:48 AM
Rainmaker
1,238,770
Gene Riemenschneider
Turning Houses into Homes
Home Point Real Estate

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

April 14, 2011 01:01 PM
Ambassador
2,368,115
Patricia Kennedy
For Your Home in the Capital
Evers & Company Real Estate, Inc.

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

April 23, 2011 10:20 AM
Ambassador
2,368,115
Patricia Kennedy
For Your Home in the Capital
Evers & Company Real Estate, Inc.

 

Hey, Holly!

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

Cheers!

Pat

April 24, 2011 10:53 AM
Ambassador
1,805,008
Jeff Dowler CRS
Carlsbad CA Homes for Sale (760) 840-1360
Solutions Real Estate

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

April 24, 2011 11:46 PM
Ambassador
291,959
Linda K. Mayer
Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST
License # 01767321

Easy explaination for clients.  hanks, Holly!

April 27, 2011 01:30 PM
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Rainmaker
538,006

Holly Weatherwax

Keller Williams Realty, Northern Virginia
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