7. A buyer has made an offer on a listed property and the seller has signed it, indicating acceptance of the offer. What must still be done before this offer becomes a binding contract of sale?
Answer: C
The buyer must be notified of the seller's acceptance.
For the offer to become a binding contract of sale, the buyer must be notified of the seller's acceptance. This notification is a critical step in the contract formation process, ensuring that both parties are aware of the agreement.
A) The accepted offer must be recorded.
Recording the accepted offer is not a necessary step for the creation of a binding contract. While recording may be important for public record purposes or for future reference, it does not impact the mutual consent that is essential for a binding agreement.
B) The buyer's earnest money must be deposited.
Although depositing earnest money is a common practice to demonstrate the buyer's serious intent, it is not a prerequisite for the formation of a binding contract. The contract is formed upon notification of acceptance, regardless of whether the earnest money has been submitted.
C) The buyer must be notified of seller's acceptance.
This option is correct because the notification to the buyer is essential for the acceptance to be effective. Until the buyer is informed of the seller's acceptance, the offer does not constitute a binding contract, as both parties must be fully aware of their agreement.
D) Nothing; the seller's acceptance immediately created a binding contract.
This statement is incorrect because, while the seller's acceptance signifies agreement, a binding contract requires that the buyer is also notified of this acceptance. Without this notification, the contract is not enforceable.
Conclusion
The correct answer is that the buyer must be notified of the seller's acceptance to establish a binding contract. All other options fail to recognize the necessity of mutual awareness in contract formation, highlighting the importance of clear communication between the parties involved.