OFFER ACCEPTED...OR NOT?

At what point does an Offer to Purchase become legally binding? Is it when the seller signs the document? Or does the seller’s obligation begin only upon receipt of the earnest money?

Consider these scenarios:

a. A seller signs an offer, but the buyer delays payment of the earnest money because they made multiple offers on different properties and are waiting to choose the best deal.

b. A seller signs an offer but has to wait for the buyer (Buyer 1) to return from an out-of-town trip before receiving the earnest money check. Meanwhile, another buyer (Buyer 2) comes along with a higher offer. Can the seller accept Buyer 2’s offer despite already signing Buyer 1’s?

c. A seller does not sign the offer but accepts the earnest money check—without depositing it—while hoping for a better offer. Is the seller still bound by Buyer 1’s terms?

These are real-life situations I’ve encountered. To prevent such uncertainties, I’ve incorporated the following clause into my Offer to Purchase/Letter of Intent template:

“This Offer shall be considered binding upon both the SELLER and the BUYER upon:

The SELLER’s signature on the space provided below; and

The SELLER’s receipt of the earnest money check paid by the BUYER.

Should the SELLER receive the earnest money check but fail to deposit it, this Offer shall still be considered ACCEPTED, and both the SELLER and the BUYER shall be bound by the provisions stated in this letter.”

Some lawyers might argue that this clause simply states the obvious. However, I believe its inclusion helps prevent both buyers and sellers from twisting the interpretation of an offer to suit their interests. At the very least, having it in writing eliminates unnecessary ambiguity.

What do you think?