Compliance
Contract Timelines — Day 2: Scenarios That Trip You Up
Contract training covered effective date computation, critical deposit deadlines, and consequences for missing financing contingencies. Contract Effective Date Defined The effective date, or day zero, is defined as the date the last person signs or initials the counteroffer or sales contract. All contract deadlines …
Contract training covered effective date computation, critical deposit deadlines, and consequences for missing financing contingencies. Contract Effective Date Defined The effective date, or day zero, is defined as the date the last person signs or initials the counteroffer or sales contract. All contract deadlines are computed using calendar days in the Eastern Standard Time zone, unless specifically stated otherwise. Deposit and Time Deadlines Earnest money deposits are typically due within 3 days after the effective date, with deposit deadlines concluding at 11:59 p.m. and 59 seconds. Deposits due on a weekend or holiday must be made on the next available business day, defined as Monday through Friday, excluding federal holidays. Financing Contingency and Backup Offers Failure to meet the loan approval deadline results in the buyer losing the right to cancel, granting the seller the option to terminate the contract after 3 additional days. A seller can accept a backup offer at any time until the closing of the primary contract, which only becomes primary if the original offer is canceled.
This content is provided for educational purposes. Compliance, contract, and license-law information reflects the instructor's knowledge at the time of recording and may not reflect current law. Always verify with your own broker or legal counsel before acting.