Amending A Real Estate Contract
A real estate contract is a complicated document containing multiple time periods. It's important for the listing agent and seller, the buyer's agent and the buyer to adhere to those time frames as time is of the essence. However, if something needs to be modified, an amendment to the contract is required. Both the buyer and seller must sign the amendment in order for it to be in force. All other terms and conditions of the contract remain the same. You know you need an amendment when:
1. The home inspection in the period specified in will not take place on time. Identify when the inspection will be completed using a specific date. Keep in mind that the inspector will need a couple of days to present his report to the buyer.
2. The loan approval, commitment date or the lender has changed. The lender can assist the buyer's agent with a better time frame. If the buyer decides to use cash to purchase, an amendment must be prepared. Changing lenders does not happen frequently, but if it does, all dates relating to financing and closing dates are likely to change.
3. The closing date has changed. Usually if the loan approval is delayed, then it is quite likely the closing date will be delayed so the two dates need to be modified and can be done on the same amendment.
4. The financing contingency will not be met on time. Be ahead of this one! If the buyer fails to waive the financing contingency within the specified days then buyer or seller can terminate the contract at any time. The buyer must provide a letter of denial from the lender in order to terminate the agreement under this contingency. Seller must submit to buyer a financing contingency waiver/termination of contract.
Be concise and brief in your amendment, for example: The closing date of July 11, 2016 shall be changed to July 28, 2016.
If you are uncertain about modifying a contract, call me or refer your customer to a legal professional for assistance.
Written By: Kathy Zorn