Importance of "Execution date" we have a real estate contract

May 30, 2021 0 Comments

In case you were unaware, actions taken on a contract are tied to the “performance” date, also known as the “final acceptance date” (Texas Association of REALTORS® (TAR) Form 1601, p. 7 ). This means that all annexes or agreements with specified time limits must be fulfilled within the specified time on a calendar day and day one begins the day after the execution date.

The most important time period for the home buyer or seller to consider is the option period, if one has been negotiated. For the sake of simplicity, let’s use a hypothetical contract signed by all parties and executed on December 31st with a ten-day option period. This means that the first day of the options period begins on January 1 and ends at midnight on January 10. This option period is often used for property inspections, insurance quotes, and repair negotiations. Once this hurdle is overcome, the assessment and survey is conducted to complete the closing process.

When it comes to homeowners association documents, surveys, and third-party financing approvals, the same rule applies. If the appendices specify a certain number of days, one has to make sure to meet the deadlines or be in default, which is never a good thing.

Remember, the clock starts ticking on the final acceptance date, also known as the execution date or effective date. Professional REALTORS® should always be aware of the time constraints within your contract and should remind you of the date as a buyer or seller. If not, be sure to ask your REALTOR® what the deadline is.

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