The Text Message That Arrived Twenty Minutes Late
Dana is designated broker of Prairie Winds Realty in Fargo. On May 2 the firm listed 412 Elm Street at $319,900. Agent Kim, a Prairie Winds licensee, began working with buyer Tom in April after he called on an ad. Kim never gave Tom any written agency document and never had him sign a buyer agreement. When Tom asked whose side she was on, Kim said, "We're all friends here - I just want everyone happy." On May 7 Tom offered $305,000 with $5,000 earnest money, a 10-day inspection contingency, and 3% seller-paid closing costs, expiring May 9 at 5:00 p.m. On May 8 at 2:00 p.m. the seller countered at $313,000, no closing-cost credit, expiring May 9 at noon. At 11:52 a.m. on May 9 Tom texted Kim, "Tell them I'll take 313." Kim was in a showing and relayed it at 12:20 p.m. The listing agent said the counter had expired; the seller had accepted a backup offer at 12:05. Tom's $5,000 check is in Kim's desk drawer.
1. Sort out the agency relationships. What should Kim have done, and what must happen now?
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Agency runs to the brokerage, not the individual licensee. Prairie Winds is the seller's agent on its own listing, so any licensee in the firm starts out on the seller's side. Kim's cheerful non-answer was a failure: agency status must be disclosed in writing at the first substantive contact, and a buyer working with a listing firm's licensee is entitled to a written explanation of who represents whom.
If Tom wants Kim to represent him and Prairie Winds also represents the seller, the firm is a dual agent - permitted in North Dakota only with the informed written consent of both parties. Until that consent exists in writing, Kim must not advocate for Tom on price and must not treat Tom's confidences as protected.
Corrective steps: stop the transaction conversation, deliver the written agency disclosure and dual-agency consent, get signatures, or refer Tom to a different brokerage. Document the conversation. Dana, as designated broker, owns supervision and should review how every unrepresented buyer is being handled.
2. Did a binding contract form on May 9? Walk through the offer, counteroffer, and acceptance mechanics.
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The seller's May 8 counter was a rejection of Tom's original offer and a new offer on different terms. That counter expired by its own terms at noon on May 9.
Acceptance must be communicated to the offeror (or the offeror's agent) before expiry. At 11:52 Tom did not accept; he told Kim to relay an acceptance. That is authorization to communicate, not communication. Kim relayed at 12:20 - after the deadline - so at most it is a late acceptance, which operates as a new counteroffer the seller is free to ignore.
The wrinkle is that Kim is a licensee of the listing brokerage. Tom could argue that telling the firm's own agent is telling the seller's agent, making acceptance effective at 11:52. That argument is only available because Prairie Winds never papered the relationship - which is precisely the exposure Dana created. In any event, the seller accepted a backup offer at 12:05, before Kim relayed, and the counter had already lapsed at noon.
Conclusion: no contract. Tom has no enforceable rights; his text is a new offer the seller may consider if the backup falls through.
3. What should happen to the $5,000 check, and what are the trust-fund implications?
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The check must not sit in a desk drawer. It is a trust fund from the moment it is received and must be handled under the Commission's trust-account rules - deposited into the brokerage's trust account within the required time once a contract exists, or returned to Tom if no contract is formed.
Because no contract formed, the correct disposition is return of the check to Tom (or, with his written direction, retention as a deposit on a new offer), with written acknowledgment and a receipt in the file.
If the firm had deposited it and the deal collapsed, release would require either the parties' written agreement or a court order; the broker does not decide who gets disputed earnest money. Dana should also audit whether other files have uncashed checks, because the pattern here - an unchecked buyer, an unpapered agency, and money in a drawer - is the kind of supervisory failure that draws a Commission inquiry.