verbal offer legally binding?

[Beechy101]

Hi,

I recently made a verbal offer on an apartment I am interested in buying. I would like to know if such an offer is legally binding, or can I withdraw it?

I made the offer through an estate agent and as far as I know he hasn't made the offer known to the owner yet. I would like to withdraw the offer that's why I am asking.

Thanks.

[Boris]

Verbal offers are often made as a beginning of process. Until something is signed nothing is taken as legal. You can " reconsider " if you wish and if the agent has not represented your offer to the owner then my guess is they felt it was unworthy to begin with in any case.

[PDLM]

If the offer hasn't been made to the owner then no problem. If it has then legally I think that strictly it's binding, but in the absence of a signed preliminary agreement of sale I doubt that the owner would come after you. The same would be true of the owner accepting an offer verbally but then pulling out when they get a higher one.

[jgl]

Most types of verbal contracts are legally binding. However, in the UK and the US certain types of contract (including real estate) must be in writing. So this is probably the case in HK.

Legality aside, relying on verbal contracts in real estate transactions in HK would be such a complete disaster area that I don't think that any agent in his right mind would pursue it.

[Katanga]

In HK, as PDLM saya, given you have not signed the preliminary agreement, you can walk away. there is no obligation whatsoever.

[Crocodile]

Even written contracts in Hong Kong sometimes have trouble being "binding", so if you said something, unless there were a couple of lawyers around, it is definitely not binding . . . . It was just a misunderstanding

I know many instances where verbal agreements have been made, but when it comes to signing something, the deal suddenly has to be changed. Can be a good negotiating technique.

[hello_there]

OP: Even if the offer has been made to the owner, no problem. In HK, contracts for the sale of land must be evidenced in writing (and meet some other statutory requirements, see the Conveyancing and Property Ordinance) to be binding.

The link below, prepared by a reputable law firm (not my firm), goes through some of the basics.

http://www.deaconslaw.com/eng/knowle...owledge_60.htm

[Football16]

Verbal can mean oral or in writing. It is not entirely clear what the OP is actually asking. Normally in buying property unless it is in writing there is not usually a binding agreement. Telling an agent you want to offer $XXXXXX is meaningless until you sign it and the seller agrees to it.

[PDLM]

There seem to be a lot of slightly different views on this (and my initial view wasn't quite right either). What the law says is:

(1) Subject to section 6(2), no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person lawfully authorized by him for that purpose.

As I understand that now, if you have authorised, in writing, the Agent to act on your behalf, and that Agent has made an offer to the vendor orally then the a professional Agent will make a note of the offer that has been given, and this constitutes an enforceable contract.
The Estate Agents' Association Guidebook states:

Therefore, a contract for the sale or other disposition of land can be:
· entirely in writing; or
· evidenced by a note or memorandum containing basic terms of the contract such as the details of the parties, the price, the property and the completion date.
The terms of a contract for the sale or other disposition of land must be certain. The contract must contain, at least,
· the parties;
· the property;
· the price; and
· other material terms, such as the completion date.
The parties should be named and described so that their identities are clear, and the property must be clearly identified and adequately described. The specific price and completion date should be stated
The law will then imply into such contract all other necessary terms common to a property transaction.

Moreover, the EAA Code of Ethics says:

2.38.4 A licensee shall keep a written record of all offers in respect of a property.
2.38.5 A licensee shall present an offer for acceptance to the client as soon as is practicable after receiving it.

So, as I said before, if the Agent hasn't passed the offer on to the vendor then no problem. If they have, and they have made (as they should) a note of the offer then you may well have a legally binding contract.

But in practice I haven't heard of anyone trying to enforce anything prior to the Preliminary Agreement for Sale and Purchase.

[Beechy101]

Thanks to everyone who replied.

After reading the posts I contacted my agent and said I would like to withdraw the offer and he said no problem. Great! The main problem is that the bank valuation of the property is 200K less than the asking price. For me the difference is too big.