In the world of real estate transactions, it is common for parties to negotiate and finalize terms through an oral agreement before putting them into a written contract. However, the question remains whether such an oral agreement, also known as an oral contract, is legally binding and enforceable.

In general, a contract is a legally binding agreement between parties, which can be formed orally or in writing. However, in the context of real estate transactions, the statute of frauds, which is a legal principle requiring certain contracts to be in writing, applies in most states. The statute of frauds varies by state but typically requires a written agreement for the sale of land or any interest in land, such as a lease or mortgage.

Therefore, if a buyer and seller enter into an oral agreement to transfer real estate, that agreement may not be enforceable if it does not comply with the statute of frauds in that state. The purpose of the statute of frauds is to prevent fraud and misunderstandings by requiring certain important agreements to be in writing, signed by the parties, and acknowledged before a notary or other authorized official.

However, there are some exceptions to the statute of frauds that may allow an oral contract to be enforceable in certain circumstances. For example, if the buyer has partially performed the oral agreement by paying the seller or taking possession of the property, a court may enforce the agreement despite its lack of compliance with the statute of frauds.

Another exception is the doctrine of part performance, which applies when the buyer has done something that can only be explained by their reliance on an oral agreement. For instance, if the buyer has made substantial improvements to the property or paid property taxes, a court may consider this evidence of part performance and enforce the oral agreement.

In conclusion, an oral contract between a buyer and seller to transfer real estate may be enforceable under certain circumstances, depending on the applicable state law and the actions of the parties. However, it is generally advisable to put all important terms and conditions of a real estate transaction in writing to avoid misunderstandings, disputes, and legal challenges later on.