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If you are buying or selling a home in East Tennessee, one of the most important things you need to understand is this: real estate agreements in Tennessee must be in writing.
As a REALTOR® with Wallace Real Estate serving buyers and sellers throughout East Tennessee, I still see confusion around verbal agreements, earnest money, contingencies, and what actually makes a contract legally binding. Even though this topic first became popular during the fast-moving real estate market of 2023, it is just as important in 2026 because the stakes are still high when buying or selling property.
Many people assume that a verbal conversation counts as an agreement. In Tennessee real estate, it does not.
Real Estate Agreements in Tennessee Are Not Verbal
If someone calls me and says, “Melody, I want you to be my real estate agent,” I appreciate the trust. However, until we both sign the proper paperwork, I am not officially their agent.
The same applies to making an offer on a home.
A buyer cannot simply call a seller and verbally offer a price. An offer is only considered official once it is written, signed, and properly submitted. Tennessee real estate law is designed this way to protect everyone involved in the transaction.
Buying a home is one of the largest financial decisions most people will ever make. Written agreements create clarity, accountability, and protection for both buyers and sellers.
Written agreements are an essential part of every Tennessee real estate transaction.
Understanding Contingencies in a Real Estate Contract
One of the biggest misconceptions I hear from buyers is, “Can I just back out if I change my mind?”
The answer depends on the contingencies written into the contract.
Contingencies are protections built into a purchase agreement. Common contingencies include:
- Financing contingency
- Home inspection contingency
- Appraisal contingency
- Home sale contingency
These contingency periods give buyers opportunities to evaluate the property and the financial details before fully committing.
For example, during the inspection period, a buyer may discover major repair issues with the home. If the inspection contingency is still active, the buyer may be able to terminate the contract according to the terms outlined in writing.
The important detail is that these protections must already be included in the written contract.
What Happens After Contingencies Expire?
Once contingency deadlines pass, the contract becomes much harder to terminate without potential financial or legal consequences.
This is where earnest money becomes important.
Earnest money, sometimes called a good faith deposit, shows a buyer’s commitment to purchasing the property. The funds are typically held by a title company or brokerage until closing.
If a buyer decides they no longer want to move forward after all contingencies have expired, they cannot simply walk away from the agreement without consequences. In many situations, terminating the contract at that stage would require a mutual written agreement between both the buyer and seller.
Even if the parties agree to terminate the contract, there may still be questions regarding the disbursement of earnest money. Depending on the circumstances and the terms of the contract, the buyer could risk losing their earnest money deposit.
There can always be exceptions based on the specific contract language and legal guidance, which is why buyers and sellers should work closely with their REALTOR® and, when appropriate, seek advice from qualified legal professionals.
This is also why understanding contingency timelines and contract obligations is so important in Tennessee real estate transactions.
Helping East Tennessee families navigate the home buying process with confidence and clarity.
Everything in Tennessee Real Estate Should Be Documented
In East Tennessee real estate, nearly every important step requires written documentation.
That includes:
- Buyer representation agreements
- Purchase offers
- Inspection requests
- Repair negotiations
- Termite inspection reports
- Amendments and addendums
- Contract terminations
Even in today’s digital world, written records are essential.
Most transactions now use electronic signatures for convenience, especially in 2026. I always encourage clients to save copies of every document they sign. Ask your REALTOR® for digital or printed copies so you can review everything carefully and keep organized records throughout the transaction.
A trusted real estate professional should always be willing to explain paperwork and answer questions before you sign anything.
Why Written Agreements Protect Buyers and Sellers
Written agreements reduce misunderstandings and help create smoother transactions.
When expectations, timelines, repairs, financing details, and contingencies are clearly documented, everyone involved knows exactly what has been agreed upon.
As someone who has worked with buyers and sellers across East Tennessee for years, I can tell you that clear communication and strong documentation prevent many avoidable problems.
Real estate transactions involve significant financial and emotional investments. Having everything in writing protects your interests and helps ensure the process stays professional and transparent.
Clear communication and written agreements help create smoother real estate closings.
Final Thoughts
If you remember one thing from this article, remember this: in Tennessee real estate, it is not official unless it is in writing.
Whether you are hiring an agent, submitting an offer, negotiating repairs, or terminating a contract under a contingency, proper written documentation matters.
As Melody Wagstaff with Wallace Real Estate, I believe informed buyers and sellers make better real estate decisions. Understanding how Tennessee contracts work can help you avoid costly misunderstandings and move through the process with confidence.
