Should Buyer extend closing date of Purchase Agreement while waiting for approval?

We are buyer of SS - currently under review by 2nd bank.  Our initial Purchase Agreement (with Seller) stated an arbitrary closing date of 02/28.  As that date neared I asked the agent whether we should be extending with an addendum - my concern was that if that date came and went and we didn't do an addendum would our contract be technically void.  Agent didn't really explain if it was necessary or not,  but sent an addendum to push the date to 4/10 which we signed. A few days prior to 4/10 we signed another addendum to extend to on or before 5/15.  Is this how this should be handled?  Neither addendum was ever countersigned by sellers so I'm thinking they may not be valid anyway??  I know the bank is going to have their own closing date once the approval comes but as I explained to the agent I wanted to be sure we had time to do our due diligence (inspections) and for our bank to do paperwork - our bank is ready to go as soon as we have approval but has told us they need 30 days.

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Permalink Reply by Bryant Tutas on April 29, 2012 at 1:34pm

Hi Tamara. Without an addendum signed by the buyer and the seller you do not have a binding contract. That means the seller can accept a better offer and kick you to the curb at any time. You are doing the right thing by signing extensions. Of course now you have to make sure the seller signs as well. Your agent needs to push this issue.

Permalink Reply by Tamara Vannest on April 30, 2012 at 1:56am

Thanks Bryant.  We have contacted our agent this morning regarding this!

Regarding the extensions is it better to write a specific date for closing or something like "closing to be 30 days from bank approval" ?  Thinking that would keep us from having to continuously extend as we currently only 2 weeks away from the last extension date, but not sure which is the better way to go from a buyer perspective. 

Permalink Reply by Smitty on April 30, 2012 at 7:40am

Bryant is right.  Wells Fargo is a stickler too if they catch that the contract has expired or is about to.  They want the addendum. I'm of the opinion it's good to have a hard date and then write (or sooner) - You can date it out 2-3 months from now and have the or sooner in case the buyer wants to close sooner.  You can always extend again if both sides agree.

Permalink Reply by Tamara Vannest on April 30, 2012 at 2:21pm

Thanks for the reply Smitty.  We will need another extension in about 2 weeks and have been using hard dates to this point so will continue to do it that way - and push for a signed seller copy!! 

We received another kink this afternoon - apparently the 2nd (PNC) won't accept the electronic signatures (that have been used by all parties throughout) so we all have to resign and resubmit.  Just another delay.....

Permalink Reply by Smitty on May 1, 2012 at 1:45am

Ahhh...happens to the best of us. I had BOA kick back electronic signatures. 

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