Why we love “effective dates” penciled in
Nothing leads to more stress for buyers and sellers than misunderstandings over when a contract is “effective”. Effective means essentially, the clock has started ticking on a deal. Since closings are time sensitive and deadline drive, whatever is the agreed to effective date affects the following deadlines:
- escrow deposit(s)
- loan application
- loan commitment
- HOA/Condo application & approval
- inspection
- survey
- title examination/title objections
- closing date
When both parties acknowledge and initial a written in effective date, deals go much smoother and people understand their deadlines
Also, real estate professionals, buyers and sellers should keep in mind that contracts vary in whether they are business or calendar days and all parties should be clear on that. The contract will specify that in the “time” clause.
Here is a picture perfect effective date scenario on a recent contract:
Please contact us at info@theclosingcompany.net or 305-271-0100×701 with any questions or for a complimentary contract review.
Legal disclaimer: The Closing Company, Inc. and blog post is not a law firm and is not providing legal or tax advice. For legal advice, please consult with a licensed Attorney. For tax advice, consult with a CPA.
