By: Joan Reed Wilson, Esq.
Spring has sprung in Connecticut and with it, flowers, birds and lots and lots of real estate contracts! In our office we’ve seen a huge increase in the number of contracts this month.
The real estate contract is typically called a “Purchase and Sales Agreement”. The transaction is initiated by the party who wants to purchase the property (usually with their real estate agent’s help) by submitting the “offer”. The offer includes the pertinent terms of the deal, including the purchase price and closing date. When the seller signs the offer, it becomes an Agreement with a capital A. It is now enforceable and the parties are bound by the terms of the document…or are they?
As most of you who have purchased a home know, the process is not always smooth. There are many steps along the way to the closing, including inspections, title searches and mortgage approval. The Agreement spells out how long the buyer has to accomplish these important steps, but sometimes they take longer than originally expected. As each step requires more and more time, guess what happens? The Closing Date is delayed.
So even though the Closing Date is clear in the offer, which then becomes an enforceable Agreement, it is not necessarily the date you will close. Buyers and sellers would be wise to be aware of this and know that being flexible is important. My advice is to not lock yourself into a moving company for that date right away, do not lock a mortgage rate that expires that day or even a day or two after (you will end up paying fees to extend the rate lock if the closing is delayed), and try your best not to get lost in the weeds of the transaction; the large majority of Agreements end up closing and in the end a week or two is not going to make a big difference in your life.
Happy Spring and Happy House Hunting!