Definition
A meeting of the minds between buyer and seller on all material purchase terms—price, contingencies, deadlines, and conditions. Mutual agreement creates a binding contract once both parties sign.
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Mutual agreement is demonstrated by both parties signing the final version of the contract or all amendments. Once mutual agreement is achieved and the contract is fully executed, both parties become legally bound to perform their obligations. Changes after mutual agreement requires additional amendments signed by both parties.
Pro Tip
Confirm your agent has obtained a fully signed contract before investing in inspections or appraisals.
Example
After the buyer submits an offer at $395,000 with specified terms, the seller provides a counteroffer, the buyer accepts the counteroffer, and both parties sign—at that point, mutual agreement is reached and the contract is binding.