A Tennessee Purchase and Sale Agreement is a legally binding contract for the sale of residential property. Within that contract are specific performance dates including loan application deadlines, home inspection deadlines, resolution of repair deadlines and closing deadlines. These are referred to as contract performance dates.
You will often hear real estate agents say, "Time is of the essence." This is especially true when adhering to contract performance dates. When items are not performed by the specified date or deadline, there are consequences. Some consequences are more harsh than others. The worst being the contract becomes null and void.
These performance dates have been created for a reason. They are not to be taken lightly. Real estate agents and their buyers and sellers must know their performance dates and comply with those dates.
I have been fortunate to work with real estate agents who closely monitor performance dates. Until this week, that is.
Two weeks ago, we were supposed to close on a property. I was representing the buyers. Unfortunately, we ran into title issues. The sellers requested four additional days to resolve the problem. They needed to get Quit Claim Deeds signed. We granted an extension and I prepared the Closing Date Revision Amendment. After four days, the sellers realized it was going to take longer than anticipated so they asked for five additional days.
Five days later, when we still hadn't closed, the sellers asked for yet another extension. My buyers were beginning to think this purchase was not going to be resolved to their satisfaction. They granted the seller another five days, however, I informed the agent if we couldn't close by 7/7, I wasn't sure what my clients would do. Once again, I prepared the extension.
On 7/7, the sellers still had not been able to present a clear title. A new property had just come on the market and my buyers quickly asked to see it. In the meantime, not a word from the listing agent. Up until this point, I had been completing all the extensions., even though, this was his listing.
Since my clients had decided to find another property, I didn't contact the agent. We were just going to let our extension expire. In this case, that meant that our contract would be null and void. The buyers could freely walk away from the purchase and be reimbursed their earnest money because the sellers had not provided clear title to the property.
At 9:15 p.m., I received a text from the listing agent asking, "What's going on?". I didn't even respond. I completed the Mutual Release of Purchase and Sale Agreement and Request for Earnest Money Disbursement and forwarded it to him. I didn't hear a word from him until 11:30 the next morning when he sent me a text that they were ready to close. Too late. My client had already written an offer on another property. The buyers had no intention of buying the first house.
The listing agent had not taken any steps to protect his sellers. I had completed all the extensions. He should have prepared an extension and sent it to me. He did not. He should have been calling me earlier in the day to try to offer some compensation to keep my buyers interested. He did not.
When he realized the next day that we weren't going to close, he tried to strong arm me into thinking he could force us to close. Fortunately, I know Tennessee contracts well and knew that we would prevail. Besides, I had spoken to the attorney a day earlier and had informed him of my client's decision. He had already confirmed the buyers were entitled to a return of their earnest money. The listing agent had to inform his sellers that he had dropped the ball.
I wish I could say this was the only time this has happened. Unfortunately, I had a very similar situation later in the week with one of my listings. A buyer was refusing to sign a Repair Amendment. Her agent had left it until the last day, even though, I had sent her the document earlier in the week. There we were at 11 p.m. completing an extension of Resolution Period to satisfy a buyer who had been neglected by her agent.
In that case, we extended the Resolution Period for a day so the buyer's agent could speak to a home inspector.
Had the agent taken the time earlier in the week to do this, we would not have been signing documents in the 11th hour, especially, given that the buyers had been granted a 14 day inspection period and 5 day resolution period.
What are performance dates in Tennessee real estate contracts?
Performance dates in the Tennessee Real Estate Contract are important. They are designed to protect buyers and sellers. They shouldn't be neglected or left to expire. All parties must be aware of the dates and make sure the corresponding documents have been properly signed. When they have not, you may wake up to realize that the contract is null and void and you haven't sold your house after all.
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