The Critical Dates of a Contract
The Critical Dates of the Purchase and Sale Agreement
The critical dates are written into the Sale Agreement and need to be respected. A Contract is not valid unless it has a beginning and end date. While these are governing dates there are other dates that are probably in the contract.
REMEMBER THAT ONLY A BUYER AND SELLER ARE PARTY TO THE CONTRACT AND ALL ADDENDUMS MUST BE SIGNED BY THE BUYER AND THE SELLER!!! I can’t tell you how many times I see agents trying to change (even with good intentions) the time lines or any other terms with an email. This does not count.
The Title Company especially on an investment property, should provide what we call a critical date letter. READ IT and make sure that you agree with the dates. If a date falls on a weekend or a legal holiday this may still be valid. Remember that in Arizona unless it is stated that this is business days it will default to calendar days. Also, the time for the expiratino is 11:59 PM AZ time unless stated otherwise.
Last year there was an agent that was representing himself and waited to send a Buyer’s Inspection Report until 11:59-but guess what he only emailed it to himself. When we realized his mistake it was exactly 12:00 midnight and my Seller did not have to make any repairs. Additionally, his Earnest Money was at risk and he utlimately closed. It was a nightmare closing but I got it done!
If a timeline is changed, the Title Company should issue a new critical dates letter. Remember that the Title Company is the “keeper” of the contract. The Critical Dates letter is very useful to be sure that everyone is on the same page!
Since I negotiated the contract, either from the Buyer or Seller’s side; I should know what the intent of the Contract will be.
One of the most frustrating items is that Lender underwriters I am not sure that they really ready the Contract. I always am watchful of the transaction to be sure that the Lender is hitting their timelines as well.
This is simply another tool to be sure that everyone understands the contract and it’s deadlines.
There are some real differences between the AAR Residential contract the Commercial contract and by reading the Contract that you sign, you have committed yourself legally to the timelines.
We will speak later about the different timelines and how they can be used both pro and con.
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I really appreciate it when title issues a critical dates letter to inform all parties to the contract what is owed by who or what is due. It keeps everyone on task to close the deal.
Thanks for sharing this vital information with us today.
Good information on the importance of having those specific dates in a contract! More great information Linda!