Contracts, Purchase Agreements, and Transaction Documents
Formation rules
Minn. Stat. § 513.01 (statute of frauds) requires land contracts to be in writing and signed by the party to be charged. A counteroffer terminates the original offer; acceptance must be communicated to the offeror to be effective.
Standard purchase agreement components
- Purchase price and earnest money, held in the broker's trust account.
- Inspection contingency, financing contingency, and appraisal contingency.
- Title review, deed type, closing date, and possession.
- Seller's Property Disclosure Statement, required for residential one-to-four unit property under Minn. Stat. § 513.55.
- Well Disclosure Certificate under Minn. Stat. § 103I.235 when a well exists on the parcel.
- Truth-in-Housing evaluation in Minneapolis, St. Paul, and other participating cities.
Worked example
A buyer signs, then receives a Seller's Property Disclosure stating the basement flooded twice - something the agent never mentioned and the buyer never asked about. Because the statement arrived after signing, the buyer's remedy is a limited right to rescind or to reopen negotiation, not automatic forfeiture of the earnest money. The agent must not coach the buyer to "just cancel"; releasing earnest money requires the seller's written agreement or a contractual basis.
Traps that cost marks
- Accepting a verbal counteroffer or treating silence as acceptance.
- Assuming earnest money is nonrefundable by default.
- Skipping the well disclosure because "the well is capped."
- Confusing the disclosure statement with a warranty of condition.