Listing Agent’s Representations Can Be Purchase Contract

Question: We made a full listing price offer of $480,000 with $20,000 earnest money for a home in Casa Grande. Our real estate agent emailed our $480,000 offer to the listing agent who emailed our real estate agent back the next day “Sounds good. Let’s open escrow. Seller signing the purchase contract. Will send tomorrow.” After we received a copy of this email from our real estate agent, we thought that we had a contract. We then scheduled a home inspection, called our mortgage broker and filled out some paperwork, and paid $250 to a roofing company for a roof inspection (because the SPDS showed prior roof repairs). Two days later, however, our real estate agent called us and said that the listing agent had apologized to her and said that the seller had accepted a $510,000 offer for the home. Even worse, the seller never signed our $480,000 purchase contract. Do we have a $480,000 purchase contract to buy the home, or do we have to start looking for another home?

Answer: You probably have a contract to buy the home for $480,000. In other words, you probably had the right to rely on the listing agent’s email stating that her seller had accepted your $480,000 offer, and that escrow should be opened. This reasonable reliance by you resulted in you scheduling a home inspection, calling your mortgage broker, and paying $250 to a roof inspection company.

Note: Similarly, the Arizona Supreme Court ruled in 2015 that  a lawyer may have apparent authority to bind a client to a settlement agreement without the client’s consent to the settlement agreement. 237 Ariz. 345.