2 deadlines you shouldn’t confuse

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10/29/2014 | Author: Editorial Staff

A recent post about the timing of earnest-money delivery highlighted confusion among some members about this topic. Specifically, the timeline for a buyer to deposit earnest money differs from the timeline for a buyer to deliver his fee for a termination option.

This legal FAQ explains the buyer’s obligation regarding earnest money. Read this blog post for information about when a buyer must deliver his option fee; the option-fee deadline changed in April. 

Categories: Legal
Tags: legal, legal faq, contract, forms, earnest money, termination option


Comments

Doris Snipp on 10/31/2014

These issues are coming up because one is not reading the contract line by line concentrating on the meaning of each line. How does a Realtor explain the contract to the buyer if they are not reading each line to the buyer. Long before you write your first contract you should have set down with your broker and gone over the contracts with them learning the meaning of each line. Also as we always tell the client if you do not understand this contract contact your attorney before signing. I would suggest the Realtor if she does not understand the Broker’s explanation call the Attorney hot Line offered to Realtors. Why would one write a contract for a buyer or seller if they do not understand the meaning. Is it possible that on line education plays a part in this lack of understanding? Making it easier to get your license has not equated to smarter Realtors or less complaints. Contracts represent a person’s largest investment but the association thinks the contract is so simple the prospective Realtor does not need a teacher in person teaching the class and where one can ask questions from which entire class will benefit.

Peggy Case on 10/30/2014

1. Three days is three calendar days unless it is specifically states business days.

2. The count starts the very next day even if the contract is signed at 11:59 PM. I always add the days to the current date so I know the correct deadline.

3. An attorney told me that delivery of the option money is NOT delivery to the buyer.  Title companies often are willing to courier the option money, but if there is a delay, the buyer would be in default.  In this competitive market, I would never allow anyone to deliver the option money but myself to make sure it got there on time.

Ron Reyes on 10/30/2014

Three days to deliver the option period money.
1. Is that calculated on business days or calendar days?

2.If the effective date on the contract is the 1st then is the third day the 3rd of that month or do the days start counting on the next day after the effective date…especially in light of some transactions that are signed late in the evening?

3.If the option money is given to the title company…does that constitute delivery of those funds by the buyer? Especially if the title company is chosen by the seller?

Denise Askea on 10/29/2014

The buyer now has three days to deliver the option money, but there is no specific number of days required for the earnest money.  Best practice, if possible, is to deliver both as soon as possible after the contract has been executed.


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Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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