Home Buying in San Antonio>Question Details

Danielle, Home Buyer in San Antonio, TX

Executed date on contract legalities

Asked by Danielle, San Antonio, TX Fri Mar 15, 2013

I am buying a foreclosed home from a well known bank. My husband and I filled out the contract and signed it and waited for the bank/seller to do the same. We have been waiting for the contract to be executed or fully signed so we can get the inspection done, etc. Come to find out, when just received the contract over a week later and the bank's broker put the execution date a day before we even filled out and signed the contract! From my understanding and my real estate agent's understanding, the way real estate works is the contract doesn't start until the last party signs it. The seller's date of signature is a over a week later than the execution date. That gives us TWO days or less to get out of contract with our couple of thousand dollars in earnest money and we just got the contract! The appointment for the inspector is the day after! IS THIS EVEN LEGAL?? I feel like we have been had and our only option is to get out NOW or we could potentially lose our earnest money! ????

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Answers

6
Richard T.,

what you're referencing in your response is the "Effective Date", not the date the document is executed by one party or the other. These are two different issues.
0 votes Thank Flag Link Wed Mar 27, 2013
In Texas, the execution date is the date that notification is given to the other party that the last signature is on the contract. For example - if you write an offer on my listing, and my seller signs it on Friday night at 10pm - (1) If I notify your Realtor on Friday night that it is signed, then the execution is Friday (2) if I notify your Realtor on Monday, then the execution date is Monday

With banks, there is another element - they have their own contracts and addenda - check the addenda you signed. See if there is something that says the contract execution date will be when they notify you that your offer is good (even though they haven't signed it yet). I have seen some like that before. If not, then your Realtor needs to tell them to change it.
0 votes Thank Flag Link Wed Mar 27, 2013
Danielle,

Great advise by other agents. Seems like there is a misunderstanding on the correct execution date. If you signed on one day and they executed it for the day before, then your agent and broker need to contact the banks agent and correct the date and challenge it. The date of an executed contract is when the last party signs the contract. Your agent and their broker can fight this and if the bank is not cooperating consult an attorney.

Best of luck,

Shail Patel
0 votes Thank Flag Link Sat Mar 16, 2013
Your agent needs to challenge the date.
You are correct that the execution date is when the last party signs.
Not when you reach verbal agreement.
Your agent and their broker should handle this issue for you.
0 votes Thank Flag Link Sat Mar 16, 2013
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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First, welcome to the world of foreclosures. Banks play by their own set of rules...if you want their home, you'll have to accept their game or move on. Don't make the assumption that banks will play be any set rules other than those they make up as they go. If you don't want to lose your earnest money, act now and terminate...otherwise sit back and hope for the best.

Second, one has a binding contract (assuming all the other elements of a valid contract exist) once all parties have agreed to the terms contained within the document and the last party is notified of acceptance of terms by the other party. The problem is that it becomes a liar's contest as to when the last party was notified of acceptance of the terms.

IF any changes were made to your initial offer, then it doesn't matter what date the sellers signs since they have rejected your offer and countered it with another offer. As such, you have not yet accepted the bank's terms and you don't have a contract...you have a counter-offer.
0 votes Thank Flag Link Sat Mar 16, 2013
A fully executed contract date begins once both parties signed it. In your case, since you signed them first, the date begins when the seller/affixes his signature. However, the delivery of the ratified contract should also be considered.

Consult your realtor and a lawyer. Your realtor should also be able to communicate this lapse of time and work something out with the bank's agent. Request an extension for all the contingencies and closing, if necessary, and get it signed by both parties.

Document, document document the process:

Best of Luck.
0 votes Thank Flag Link Sat Mar 16, 2013
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