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My wife and I put an offer in on a house that was (after brief haggling) accepted. We went into attorney review. The seller is now asking for an extension of attorney review because they are having an issue finding a place to live. Our original hoped for closing date was Nov 5.
The seller's attorney has talked about maybe doing a mid-November closing with them still occupying the house until they are ready to move.
We would prefer to
(1) give them until 10/10 to finalize the contract and get out of review.
and
(2) establish a closing date of 12/15 with no provision for occupancy.
My question is this - if they agree to this and the paperwork is all signed, what happens if say on Nov 30 they announce that they haven't found a place to live and no longer want to sell the house. I know in attorney review either party can back out of the deal but I'm not sure what happens if one tries to afterwards. We really like this house and don't want to lose it but at the same time want to protect ourselves and not be homeless at the end of December when our lease runs out.
A deal is never done until it's done as in closed. They can back out any time....not legally, and you would probably be entitled to damages, etc. Do you have your own attorney? They would be the best person to tell you how to proceed and to cover yourself as far as getting back your deposit and any damages, should the sellers back out....providing they even sign your terms. Has the original attorney review ended (from the way I read your post, it hasn't)? If so, you do not have to extend it. But if it hasn't ended and you don't extend it, they can walk now.
we were in the same situation this summer and after 5 long weeks of attorney review, we cancelled the deal. the seller's wouldn't agree to our timeframe and keep extending attorney review while they started a search for a new home and in the end the house they wanted to purchase had inspection issues, so they cancelled their contract on that purchase. it was all very fustrating for us.
if you are willing to work with them, you must have something that will say your sale is in no way contingent on them purchasing/finding a new home. work with your attorney on this.
The offer should have terms that are agreed to, such as a closing date. Ask your attorney, but I believe they can back out at any time. I know that the deal isn't final until you close. Should a seller receive a better offer after attorney review, he can still accept and the buyer can lose the house.
Fyi, in the state of New Jersey there is a thing called "time is of the essence." In layman's terms it means that either the buyer or the seller can elect to extend the closing date of a property by 10 additional days max (even after you're out of attorney review and both sides have agreed on a closing date).
I had a first-time buyer client earlier this year who had hired her moving company, got the date confirmed, locked in her move-out date with her previous landlord and all. The sellers of the home pulled that "time is of the essence" trump card in the "11th hour" 3 days before our closing, and my buyer was traumatized. The attorneys & I worked it out in the end but it was a doozy. Legally, the sellers were within their right. Morally though, they put BAD karma into the universe.
Fyi, in the state of New Jersey there is a thing called "time is of the essence." In layman's terms it means that either the buyer or the seller can elect to extend the closing date of a property by 10 additional days max (even after you're out of attorney review and both sides have agreed on a closing date).
I had a first-time buyer client earlier this year who had hired her moving company, got the date confirmed, locked in her move-out date with her previous landlord and all. The sellers of the home pulled that "time is of the essence" trump card in the "11th hour" 3 days before our closing, and my buyer was traumatized. The attorneys & I worked it out in the end but it was a doozy. Legally, the sellers were within their right. Morally though, they put BAD karma into the universe.
Best of luck,
Amber Noble-Garland
That's not at all what time is of the essence means. Time is of the essence (TiotE) means that closing on time, by a date certain, is important to one of the parties, and that they are setting a date by which the closing must be complete. TiotE is usually declared because one party has gotten frustrated by the delays in closing that they feel the otehr side is causing. Those sellers may indeed have requested a later closing date, but the certainly didn't do it by declaring TiotE. Perhaps your buyers attorney, when told that the sellers wanted to extend the closing, declares TiotE on behalf of the buyer, forcing a certain closing date.
Last edited by Bill Keegan; 12-20-2008 at 09:25 PM..
Reason: typo
That's not at all what time is of the essence means. Time is of the essence (TiotE) means that closing on time, by a date certain, is important to one of the parties, and that they are setting a date by which the closing must be complete. TiotE is usually declared because one party has gotten frustrated by the delays in closing that they feel the otehr side is causing. Those sellers may indeed have requested a later closing date, but the certainly didn't do it by declaring TiotE. Perhaps your buyers attorney, when told that the sellers wanted to extend the closing, declares TiotE on behalf of the buyer, forcing a certain closing date.
Hello Bill,
What I said is factual, not an opinion or my own interpretation.
I am clear on what "time is of the essence" (TIOTE) is in the state of NJ as I have experienced it with clients on both sides of more than one transaction (buying & selling).
If you'd like to discuss it with me further directly and offline, I'd be happy to do so.
What I said is factual, not an opinion or my own interpretation.
I am clear on what "time is of the essence" (TIOTE) is in the state of NJ as I have experienced it with clients on both sides of more than one transaction (buying & selling).
If you'd like to discuss it with me further directly and offline, I'd be happy to do so.
All the best,
Amber Noble-Garland
If you think it's something other than what I said it is, and especially if you think that declaring TiotE gives someone the right to suddenly extend things, then you are mistaken. Here's the result page of a quick Google search on the phrase, which is widely used in contracts of all sorts, and rather commonly understood. I have no need to discuss it with you, but will be more than happy to have a cordial conversation about it, should you like. Contact me at your leisure.
Last edited by Bill Keegan; 12-27-2008 at 09:01 PM..
Reason: Added the link
What I said is factual, not an opinion or my own interpretation.
I am clear on what "time is of the essence" (TIOTE) is in the state of NJ as I have experienced it with clients on both sides of more than one transaction (buying & selling).
If you'd like to discuss it with me further directly and offline, I'd be happy to do so.
All the best,
Amber Noble-Garland
Sorry Amber...what you said is wrong...
This is standard contract speak for do it on time or be in breach.
NJ is notorious for weird stuff I gather...but Time is of the essence...is not a Jersey thing...it is universal.
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Time Is Of The Essence...
