11-30-2012 06:03 AM
When does the attorney review period legally begin in Illinois when using the 5.0 multiboard standard contract and the accompanying short sale addendum, unaltered. The standard contract says it begins at Date of Acceptance, which normally is when buyer and seller sign, but my attorney assures me that there is not an executed contract until the bank provides approval, and that legally triggers the attorney review period beginning. I have seen others in various forums suggest to write in explicitly in the contract that attorney review begins when the lienholder provides approval.
For someone that has dealt with short sales, can you offer your experience with this?
12-01-2012 03:13 AM
With a short sale nothing happens until the banks approves the deal. No appraisals, inspections, loan approvals. You can't have a valid contract until the bank approves the sale.
12-01-2012 06:45 AM
I have helped several buyers purchase short sales in the past 24 months. In my opinion, given the terms you had offered above, the attorney review and home inspection contingency period would begin upon receipt of the signed contract from the seller. There is nothing in the standard unaltered addendum that suggests otherwise. If the parties were to use Rider 20B, there is an option for the parties to decide if these contingency periods begin upon acceptance or bank approval. I am not an attorney, so I would always defer to my client's attorney as we moved through the transaction.
I always recommend my buyers conduct their home inspection during that initial five day period. Since Short Sales are "As-Is" transactions, I feel that it is in everyone's best interest for the buyer to find out if they are willing to move forward sooner than later. Ultimately, if we find something that would require a credit during the inspection, we are more likely to have it approved by the lien holder if it introduced early in the process.
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12-03-2012 08:49 AM
Thanks very much for the replies. I ended up writing in language indicating attorney review period ends 5 days after buyer receives lienholder approval, and my attorney is going to issue a standard attorney review extension letter.
12-03-2012 07:04 PM
Greg Whelan nailed the answer, if you do not want the contingencies to start with acceptance by the seller of the contract, you need to change the definition to lender acceptance, otherwise the contingencies begin to toll with acceptance by the seller.