Feb 21, 2013

Tip 8-2013: Short Sales - When is the Contract Ratified?

When is the Short Sale contract considered to be "ratified"? Is it ratified when both the Buyer and the Seller sign the contract or when the Short Sale lender approves the short sale?

As discussed in prior Tucker's Tips, the Short Sale contract, similar to any regular VAR contract, is ratified when both parties (the Buyer and the Seller) sign and initial the same contract. In other words, the contract is fully ratified when it is completely executed by both parties.

The approval by the Short Sale lender (which will usually take several months) is only a contingency for completing the closing. The Short Sale approval is simply one of the contingencies (loan commitment, inspections, etc.) to be satisfied before the closing can be completed.

Although the Short Sale contingency is the "big elephant in the room," it is still just a contingency. The contract is ratified when it is fully executed by both the Buyer and the Seller.

Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, VA 434-973-7474
Lake Monticello (Palmyra, VA) 434-589-3636

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