Key Takeaways
- Nebraska follows the Statute of Frauds requiring real estate contracts to be in writing
- Valid contracts require offer, acceptance, consideration, legal capacity, and lawful purpose
- Earnest money should be deposited into the broker's trust account within 72 hours or the next banking day after offer acceptance
- Listing agreements and buyer representation contracts must be in writing for residential property
- Contingencies (financing, inspection, appraisal) must be clearly specified in the contract
Nebraska Contract Requirements
Nebraska real estate contracts must meet specific legal requirements to be valid and enforceable.
Statute of Frauds
Under Nebraska's Statute of Frauds, contracts for the sale of real property must be:
- In writing
- Signed by the party to be charged (or their authorized agent)
Key Point: Oral agreements to sell real estate are generally unenforceable in Nebraska.
Essential Elements of a Valid Contract
| Element | Description |
|---|---|
| Offer | Clear proposal with definite terms |
| Acceptance | Unequivocal agreement to the offer's terms |
| Consideration | Something of value exchanged (usually money) |
| Legal capacity | Parties must be competent to contract |
| Lawful purpose | Contract cannot be for illegal purposes |
| In writing | Required for real estate contracts |
Written Agreement Requirements
Single Agency Agreements
For residential property (1-4 dwelling units), Nebraska requires written agreements:
| Type | Requirement |
|---|---|
| Listing agreement | Must be in writing before engaging in activities |
| Buyer agency agreement | Must be in writing (mandatory July 1, 2025) |
Required Contents
Written agency agreements shall include:
- Licensee's duties and responsibilities
- Terms of compensation
- Fixed date of expiration
- Whether subagency may be offered
Important: Effective July 1, 2025, written buyer representation contracts are mandatory for all agents working with buyers.
Earnest Money
Earnest money (also called a good faith deposit) shows the buyer's serious intent:
Handling Requirements
| Requirement | Details |
|---|---|
| Deposit timeline | Within 72 hours or end of next banking day after offer acceptance |
| Where deposited | Designated broker's trust account |
| Who holds | Designated broker (not salesperson) |
| Disbursement | Per contract terms or mutual agreement |
Cooperative Sales
In cooperative sales between brokers:
| Situation | Requirement |
|---|---|
| Selling broker receives earnest money | Deposit within 72 hours or next banking day after acceptance |
| Check returned NSF | Seller must be informed immediately |
Warning: Failure to properly handle earnest money is a serious violation that can result in license discipline.
Common Contract Contingencies
Contingencies allow parties to exit the contract if certain conditions aren't met:
Financing Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can cancel if financing not obtained |
| Deadline | Must apply for loan within specified days |
| Documentation | May require denial letter from lender |
Inspection Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can inspect property and negotiate repairs |
| Timeline | Inspection period specified in contract |
| Options | Accept, negotiate repairs, or cancel |
Appraisal Contingency
| Element | Details |
|---|---|
| Purpose | Protects buyer if property appraises below price |
| Options | Seller reduce price, buyer pay difference, or cancel |
Time is of the Essence
Many Nebraska real estate contracts include a "time is of the essence" clause:
- Deadlines are strict and legally binding
- Missing a deadline may constitute breach
- Extensions require written agreement
Exam Tip: Understand the difference between an executory contract (not yet performed) and an executed contract (fully performed).
Under Nebraska's Statute of Frauds, which statement is TRUE about real estate contracts?
How quickly must earnest money be deposited into the trust account in a cooperative sale in Nebraska?