Most Minnesota sellers have no idea they’re signing away leverage. I learned that the hard way—in court, with a seller who was left fighting for title to their own home.
This wasn’t a case about a missed payment or a minor dispute. It was about a buyer who gained control of the property the moment the seller e-signed—without ever putting a dollar down. The contract? A standard-issue MAR (Minnesota Association of Realtors) Purchase Agreement.
The seller had been assured the earnest money would come later, that the buyer was “solid,” and that it was “how things are done.” But the money never came. And because the MAR form permits a two-business-day delay (or more, in practice) for submitting earnest money, the buyer exploited that window to gain legal leverage over the home. Months of uncertainty followed. Then litigation. Then years of delay.
That’s when I adopted a new policy:
No dough, no deal.
⚠️ The Loophole Most Sellers Don’t See
The MAR Purchase Agreement contains a quiet but dangerous clause: it allows buyers to delay their earnest money deposit until two full business days after the contract is signed.
This delay isn’t a clerical convenience—it’s a legal vulnerability.
Under a doctrine called equitable conversion, the buyer may be treated as having ownership rights as soon as the contract is formed, regardless of whether they ever pay a dime. If the buyer defaults, disputes title, or even fakes a payment confirmation, the seller is the one left holding the bag.
I’ve seen it happen. I’ve litigated it for years. And in every case, the sellers signed thinking the system would protect them. It didn’t.
📜 What Sellers Don’t Know Can Cost Them
Here’s what the MAR form’s delayed earnest money clause can mean for you:
- Your buyer gets legal leverage over your home with $0 down.
- If they default, you’re left to clean up the mess—sometimes for years.
- Your title can be clouded and cancellation contested.
- Fraudulent “proof” of payment may circulate, deepening the confusion and liability.
And because systems like TrustFunds are used to “deliver” earnest money digitally, there’s often no independent verification, no cash in trust, and no reliable timestamp linking payment to acceptance.
🚫 Why L is For Lawyer Will Never Use the MAR Purchase Agreement
At L is For Lawyer, we flatly reject any contract that permits delayed earnest money.
We don’t sign them.
We don’t endorse them.
We don’t expose our clients to that risk.
Instead, we require:
✔️ Verified, receipted earnest money delivery (preferably a cashier’s check)
✔️ Before the seller signs—not two days after, not after inspection, and definitely not “upon contingency resolution”
✔️ Full transparency and contract terms that reflect performance, not promises
We will not tolerate template MAR Purchase Agreements that let buyers claim equitable title without financial skin in the game. Minnesota sellers deserve better.
🧭 Want to Reform Real Estate in Minnesota?
If you’ve been burned by the MAR form—or want to avoid becoming the next cautionary tale—let’s talk. The legal system shouldn’t be your first line of defense. A well-drafted contract should be.
No dough, no deal.
That’s not just a catchphrase—it’s a legal standard every seller should live by.
#RealEstateLaw #MinnesotaRealtors #EquitableConversion #EarnestMoney #TitleFraud #ConsumerProtection #MARforms #SellersRights #LitigationInsights #ReformRealEstate
