When Does Accepted Short Sale Offer Become Binding?
QUESTION: I represent a seller who is involved in a possible short sale. I have received an offer on the Offer to Purchase and Contract (form 2-T) with an attached Short Sale Addendum (form 2A14-T). A check for the earnest money was submitted with the Offer. If my seller client accepts the offer, does it become a legally-binding contract then or only later if and when the lender (hopefully) approves the short sale? I need to know when I am supposed to put the earnest money deposit into my firm’s trust account.
ANSWER: The offer will become a binding contract at such time as your seller client signs the offer and that fact is communicated to the buyer or the buyer’s agent. See the introductory paragraph in the Offer to Purchase and Contract. The fact that the sale will require approval from the seller’s lender doesn’t mean that the contract isn’t binding. If your seller accepts the offer, you should deposit the earnest money deposit into your trust account no later than three banking days following the acceptance.
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