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enforceable. Therefore,
every point in the negotiations needs to be put in writing for the protection
of all parties.
In the event that such an agreement is reached,
the offer/counter-offer now becomes a binding contract, a/k/a Contract.
The date that agreement is reached is known
as the Binding Agreement Date. As of this date, the Listing Agent
informs the world that a Sale is Pending or that the home is Under
Contract. (The Listing Agent may choose to put an Under Contract sign
on the property.)
The Binding Agreement Date is very important
as that is the date from which several deadlines are established. For
example, it typically establishes the date by which the inspections must
be completed. It sometimes establishes the date that loan approvals are
due. It also alerts the party holding the Earnest Money that such
funds must be deposited into an escrow account.
The Earnest Money is the money that the Buyer
has put in escrow to demonstrate his or her good faith that he or she
plans to complete the requirements for purchasing the home. Those requirements
typically include putting forth his or her best efforts in pursuing a
mortgage loan, completing inspections, showing up for the closing, etc.
In the event the Buyer cannot meet certain
contingencies in the contract — qualifying for the mortgage loan
for example — the Buyer is typically entitled to a full refund of
the earnest money. However, if the Buyer just has a change of heart and
decides that he or she doesn't want to buy the home, the Buyer normally
forfeits the Earnest Money. The Seller may keep the Earnest Money as liquidated
damages or the Seller may sue for performance (of the contract). Additionally,
the real estate agents may sue the Buyer for their commissions.
Similarly, if the Seller changes his or her
mind about selling the home, the Buyer may sue for performance (of the
contract).
During the "Under Contract" period, various
other professionals are brought in for their expertise. We'll look at
the role of each of those professionals in a later article. Ultimately,
everyone hopes to meet at the closing table for a successful transfer
of title from the Seller to the Buyer.
As the number one seller of homes in the
30189 zip code, Gina's team members are recognized as the experts in helping
people buy and sell Towne Lake area homes. We hope that you love Gina's
magazine, The TowneLaker, and that you will think of us, CENTURY 21 Advantage,
first when you need to buy, sell, or lease real estate in the Towne Lake
area.
Visit us at ginacarr.com or
viewtownelakehomes.com.
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