Do I need a written contract when I am buying a house?

A short, plain, written signed contract, will beat an oral agreement every single time. This is especially true if trying to buy or sell a house. It is incredibly easy to have a contract that would hold up in court. IF YOU DON’T DO THIS, you will run afoul of Ohio’s statute of frauds, and your contract is completely unenforceable, which means that none of the agreements will count if something goes wrong.

Ohio requires that any contract for real estate sale is only enforceable if it is in writing and signed by the person that it is being enforced against R.C. 1335.05. This means that it simply does not matter whether you and another person (let’s face it, it’s probably a family member) have verbally agreed to the sale of a house. Nothing in writing, no enforcement.

 This doesn’t mean, however, that someone can just take your money and run if you do pay them funds and they don’t deliver the property, but it is much, much harder to recover. You may have grounds to challenge them with something called “unjust enrichment”. When an oral contract is deemed unenforceable under the statute of frauds, but one party has fully performed under the contract, the person who has fulfilled their side of the contract may have cause to challenge the party who hasn’t fulfilled their side of the bargain.

 The problem you run into here is that the terms of the agreement quickly become a credibility contest and a court is not going to be especially sympathetic with a party that didn’t bother to write down the terms of the house purchase.

 The short version: you may trust your brother/sister/parent/best friend a whole bunch and don’t feel the need to write down a formal agreement. Resist this urge. You are setting yourself up for heartbreak. Put it in writing, or don’t buy it at all. If it is too late and you have already run into trouble with this, or would like assistance with your contract to prevent this, give me a call.