When is a deed purchase binding

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When is a deed purchase binding

I purchased a recreational 7 acres in IOWA via discussion with a realtor yesterday. It turns out that the property is not what I thought it was, so after some research on the following morning I do not want it. I gave the realtor a check Thursday at 1 pm. Friday called and said I no longer want the property, called and told the treasurers office to return the deed to sender. Am I legally binded to this? The deed transfer is not completed but the seller does have my money. No contract or nothing else was signed.

Asked on November 1, 2019 under Real Estate Law, Iowa

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

Under what is called the "statute of frauds" (see link to your state's statute below, specifically item #3), a contract to buy real estate must be in writing signed by both parties to be enforceable. Therefore, if the transfer did not go through yet, you are not required to buy the property: there is no enforceable contract to force you to do so. The seller would be entitled to keep some or all of the deposit, however, in an amount sufficient to compensate him/her for any costs he or she incurred (e.g. if he or she had to pay any fees in connection with the cancelled transfer, or any amounts to his/her realtor), because that does not depend on the sale being enforceable in court: it is based on the fact that if your actions cost another money, they can seek compensation from you.
https://www.legis.iowa.gov/docs/code/622.32.pdf


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