Question for Realtors or experienced Buyers/Sellers

shdw01 · Aug 21, 2007

What happens when the escrow expiration date expires? I know it could expire for many reasons (even the escrow company could be at fault)....but is there a general procedure?

Here is my situation:

Put an offer in on a home June 25 along with 5 other buyers.....my original offer had a 60 day closing period no later than 8/31/07.

Ended up accepting another offer which fell through the next day.....and the following day they accepted their second choice of offer and I was placed as the backup. The only amendment made was the closing period of the amendment....they wanted it quicker so the back up contract had 45 days to close no later than August 15, 2007.

I know one reason my offer wasn't accepted was because of the closing period which would lead me to believe that the one that was accepted was to close at least by 8/15/07 per the contract agreement. As of today (8/21/07), I see the house is still "in escrow".

I'm sure this could mean absolutely nothing (could list as "sold" tomorrow), but with backup offers in place, does the expiration of an original contract bind the seller to the backup offer? (The counter from the seller was signed by me back in June/July)

Thanks

joeyfitzclick · Aug 21, 2007

If the first deal does not close for any reason, expiration or otherwise, your contract automatically becomes a valid binding contract.

When you sign a back up offer it is the exact same as signing any other purchase and sales agreement, except for the back up clause. Once that is removed your contract is valid, regardless of why it fell through.

shdw01 · Aug 21, 2007

This is kind of what I was thinking....

....i think my realtor is off-island right now, so i'm not sure if she has been contacted.

...but if the buyer and seller are both still interested, who is there to regulate this? Is there even a way? Assuming the delay was reasonable, it would be in the best interest of both parties (current buyer and seller) to extend the current agreement since that would most likely be faster than an additional 45 day beginning now (if my backup offer were to come into play)

I'm afraid there is no one to watch over this which almost makes my backup offer useless....

joeyfitzclick · Aug 21, 2007

They can sign a closing extention agreement if they are both agreeable. Unless there is a 'time is of the essence' clause in their contract, reasonable time must be allowed even beyond the closing date.

Regardless you have no say in what happens as long as they both are agreeable.

joeyfitzclick · Aug 21, 2007

shdw01 said:
This is kind of what I was thinking....

....i think my realtor is off-island right now, so i'm not sure if she has been contacted.

...but if the buyer and seller are both still interested, who is there to regulate this? Is there even a way? Assuming the delay was reasonable, it would be in the best interest of both parties (current buyer and seller) to extend the current agreement since that would most likely be faster than an additional 45 day beginning now (if my backup offer were to come into play)

I'm afraid there is no one to watch over this which almost makes my backup offer useless....

This not correct. If there deal falls through, you have a fully executed P & S agreement, regardless of your agents indifference.

shdw01 · Aug 21, 2007

So if i understand this correctly, the backup is good only if the first deal falls though...

....time expiration past the closing date per contract agreement does not "count" as "first deal falling through" as long as both the buyer and seller (pretty much buyer) still want to make the transaction happen.

joeyfitzclick · Aug 21, 2007

shdw01 said:
So if i understand this correctly, the backup is good only if the first deal falls though...

....time expiration past the closing date per contract agreement does not "count" as "first deal falling through" as long as both the buyer and seller (pretty much buyer) still want to make the transaction happen.

Provided there is no time is of essence clause, that either party decided to enforce.

shdw01 · Aug 21, 2007

thank you for the response....this actually answers my question pretty good.

I just realized it is a week past the desired closing date and wondered if I'd automatically have a decision....but being that I'm sure both parties still want to make it happen, I'm just gonna sit back and wait.

Not sure if it would've been a good or bad thing anyways....housing market since 2 months ago has slowed some, but the inventory isn't that great either....

joeyfitzclick · Aug 21, 2007

shdw01 said:
thank you for the response....this actually answers my question pretty good.

I just realized it is a week past the desired closing date and wondered if I'd automatically have a decision....but being that I'm sure both parties still want to make it happen, I'm just gonna sit back and wait.

Not sure if it would've been a good or bad thing anyways....housing market since 2 months ago has slowed some, but the inventory isn't that great either....

hotdog642 · Aug 21, 2007

the closing date on a contract is an "on or about" date. It means nothing unless as click stated one of the attorneys prepares a time is of the essence clause. In which case, if that deadline passes their initial deal is Null and they contact the agent of the back up offer, you. This is the way it is handled in NY.. other states might vary.

fhmesq44 · Aug 21, 2007

Do you still want the property? You should contact the escrow company/seller and find out the status of the first deal. If you no longer want the property, withdraw your offer. I am sure this was done on a form and is probably a contractual mess. If you want someone to look at the contract, get my email address from a mod.

shdw01 · Aug 21, 2007

fhmesq44 said:
Do you still want the property? You should contact the escrow company/seller and find out the status of the first deal. If you no longer want the property, withdraw your offer. I am sure this was done on a form and is probably a contractual mess. If you want someone to look at the contract, get my email address from a mod.

what do you mean (bold)?

Look at the contract? you mean the back up offer contract I have? I assume I am not entitled to review the contract between two other parties.

Akillies · Aug 22, 2007

your realtor should be answering all these questions. they should have someone handling their business if out of the office for any reason. This is what they are paid for.

fhmesq44 · Aug 22, 2007

shdw01 said:
what do you mean (bold)?

Look at the contract? you mean the back up offer contract I have? I assume I am not entitled to review the contract between two other parties.

typically residential purchases are done on pre-printed form contracts that are often a complete mess. something like this probably has either one little paragraph in the contract where you check the box or a pre-printed addendum that you add on to the contract. depending what that contract says, you may be obligated to close escrow in like 4 days after you are notified that you have the deal (if you used fixed dates in the contract instead of X days after acceptance or notice that the contract is in effect). There are a million other problems involved in this, I am sure. Typically the back up offer would want to limit the seller's right to make material modifications to the primary offer. does it become automatically operative? how are you to know? can you back out? lots of things, I am sure.

More important question at this point is, do you still want it?

shdw01 · Aug 22, 2007

Akillies said:
your realtor should be answering all these questions. they should have someone handling their business if out of the office for any reason. This is what they are paid for.

I agree, I should give her a call to see what she thinks.

shdw01 · Aug 22, 2007

fhmesq44 said:
typically residential purchases are done on pre-printed form contracts that are often a complete mess. something like this probably has either one little paragraph in the contract where you check the box or a pre-printed addendum that you add on to the contract. depending what that contract says, you may be obligated to close escrow in like 4 days after you are notified that you have the deal (if you used fixed dates in the contract instead of X days after acceptance or notice that the contract is in effect). There are a million other problems involved in this, I am sure. Typically the back up offer would want to limit the seller's right to make material modifications to the primary offer. does it become automatically operative? how are you to know? can you back out? lots of things, I am sure.

More important question at this point is, do you still want it?

I am not sure if I want the house....this may be a reason why I'm not really bugging my realtor for answers yet.....

I guess everyone is right, if I don't want it, I should withdraw the back up offer.

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