Valid real estate offers must be in writing, and signed

Q. My wife and I made an offer on a short-sale home, which the sellers agreed to for $240,000. We gave our $2,500 earnest money with the offer. The bank countered for $15,000 more ($255,000). Our agent then wrote a letter to the seller's agent giving our counteroffer of an additional $5,000 ($245,000). We never signed any papers or anything after the initial contract for $240,000. The sellers didn't accept our counteroffer in writing; it was more "implicit" since they took the counteroffer of $245,000 verbally to the bank.

While waiting for an answer, in the last month, we have found another home that we are in love with. Our attorney retracted our counteroffer in a letter signed by him. The sellers however are saying they accepted the offer in good faith and presented it to the bank, but they never formally sent us anything in acceptance. They are holding us to the short-sale addendum in our contract of 90 days (Nov. 29). We would like to get out of this contract ASAP because we are trying to purchase this other home.

Is there any way we can push for the sellers to release us or do we have to wait the 90 days? We don't mind forfeiting the $2,500 to the sellers to get out of the contract. We presented the $2,500 as an offer to let us out of the contract, but they are stalling to hear back from the bank for the $245,000. If we are obligated to stay in the contract for 90 days, are we obligated to buy it for the $245,000 price?

This experience has ruined our desire for the short-sale house and we don't want to buy it anymore, even if we lose the new dream house.

We appreciate your time and advice.

A. As it does not appear the seller/bank formally accepted your counteroffer of $245,000, a contract was never formed. Every law student learned in Contracts 101 an offer is viable until it is accepted, rejected, countered or revoked. Your offer was countered by the seller/bank's demand for an additional $15,000, so your offer of $240,000 was no longer a live offer. The seller/bank then made an offer to you ($255,000). You were then placed in the same position the seller/bank was in when your offer was made. You could accept, reject or counter. You made a counteroffer ($245,000). That offer was then live until it was accepted, rejected, countered or revoked.

Forget the "implicit" acceptance. Contracts for real estate must be in writing, signed by the parties, also Contracts 101. If no writing exists accepting the $245,000 counteroffer, no contract was formed. Prior to your counteroffer being accepted, you revoked your counteroffer, so acceptance was no longer an option for the seller/bank.

So, not only is the contract terminated, but you are entitled to have your deposit returned to you. I would contact the listing agent and demand the return of your deposit. If he/she does not cooperate, speak to the broker of the agency. Unfortunately, they probably will not agree to return the deposit absent approval of the seller.

In the event seller refuses to cooperate, you may have to sue them for the money, though based on the facts as you describe them, you would appear to have a winning case.

• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.