Streamline Tech Sales Closing in Legal Agreements

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as a real estate agent it is one of the dreaded phone calls that you receive sometimes and you find out that your client wants to terminate the contract I'm Tiffany Weber I'm a North Carolina real estate attorney in Mooresville and I practice at Thomas and Weber we put out real estate law educational videos like this one today I'm going to talk you through who can terminate in the contract and standard offer to purchase and how do you terminate it is no fun we know that it's not ideal and it may be tempting to just send over a quick text to the other side but you have to be sure to execute the termination in the correct way to make sure that you have actually canceled the contract and that you're not inadvertently still under contract again this is assuming you're using the July 2022 version that's the new version that has come out always check your form to make sure that you're using the most current version so that's what we'll be talking through today all right so first who can terminate generally speaking the buyer can terminate at any time for any reason or no reason at all now whether that buyer gets to keep some of their deposits depends on the timing of the tournament Nation but in North Carolina the buyer can walk away no matter what the buyers Never contractually Bound to actually close on the property now the opposite is true for the seller the seller can almost never walk away absent some sort of breach so if the buyer has fulfilled all the terms of the contract they've delivered their due diligence and earnest money they haven't done anything else to fail to complete their obligations under the contract then the seller is bound to sell the property to the buyer of course there are always exceptions to that so let's take a look at what the contract says about when the parties can terminate right here is one of the seller's narrow rights to terminate under the North Carolina offer to purchase and that is should buyer fail to deliver either the due diligence fee or any initial earnest money deposit by their due dates or should those funds not be honored for any reason then the buyer gets One banking day after the seller says Hey pay me my money and if the buyer doesn't timely deliver the required funds then the seller gets the right to terminate the contract now let's say that the seller gets to do that but the buyer doesn't deliver their funds and the seller has the option now to terminate the contract well there is a form that they can use it's the notice to the buyer that sellers exercising their unilateral right to terminate there's a form for this in the standard North Carolina forms and the seller has a way to identify in this form and is an agent you'd be filling this out for your seller who are the parties what's the property when was the contract date effective and what is the reason that the seller is unilaterally terminating so that would be you know failure to deliver due diligence or earnest money or the additional earnest money deposit and if the buyer has not done either of those things then the seller can use that as an opportunity to terminate should they desire now the seller doesn't have to terminate for that let's say there's some reasonable mistake or misunderstanding that the buyer didn't deliver the funds on time say the buyer delivers the funds one day later better than required but the seller still decides to move forward sure they can move forward they don't have to terminate because of this particular incidence but they can terminate I have another reason that a seller might be able to terminate under the North Carolina contract is located in the contract under the delay and settlement paragraph and this actually goes both ways so the settlement date in the contract is something that it's a time is of the essence type Clause meaning that that date actually means something and it matters it's not we're going to close about August 15th it means we're closing by August 15th and if we don't close by August 15th then we've got problems this contract has been breached by somebody now the North Carolina offered a purchase has a paragraph to allow for a little bit of leeway if let's say the parties are ready and willing and able to complete the contract or one party is ready willing and able and the other is almost ready but they have some situation going on that's just outside their control that's causing a delay now this has to be a good faith reason it can't just be you know that one party is sitting back saying I don't want to sell anymore so let's just put them on Ice that's not a good faith reason and the contract implies good faith of the parties so provided that the delaying party you know gives notice that they're actually working towards completing settlement then the contract allows up to seven days past that settlement date to complete the contract if the delaying party does not fulfill its obligations by that seventh day then the non-delaying party has the right to terminate the contract so in this case the delaying party might be the buyer or it might be the seller so this would would mean that if the buyers the delaying party then the seller would go back to this form we just talked about and they would check the box that said buyers delay and settlement beyond what was allowed by the contract so that would be their reason for the unilateral termination now the buyer has that same option if the seller does not complete closing by the specific date so they would deliver a similar notice to the seller of their unilateral termination of contract so there's a lot more reasons in the contract for a buyer to be able to terminate in addition to the fact that there is no reason at all required but some of these reasons carry breach with them meaning that the buyer could get their deposits back so examples of this would be if the seller failed to deliver the required disclosures like the property disclosure statement the mineral oil and gas rate statement lead-based paint whatever is required under the contract for the seller to deliver based on the age of the home and the circumstances a unilateral reason to terminate would be just that the buyers decided they don't want to buy the house anymore and they terminate during the due diligence period and they get their earnest money back there's also in the contract there's discussion of the fact that the property needs to be in the same or better condition as it was at the time the offer was made and if it's not then that could be considered breach and then of course the one that we discussed already is that the delaying party in this case it would be the seller does not complete the closing by the required date so this would allow the buyer to tell the seller hey I am exercising my right to terminate under these scenarios the buyer would be able to get their at least their earnest money back and some of those potentially their due diligence fee as well so this would be the buyer's delivery of notice to the seller for that purpose now there's always always the option that buyer and seller mutually agree to terminate the contract and they decide in writing what's going to be refunded into whom so if the buyer and sellers say yep we're both on board Let's uh let's go ahead and terminate this contract yes buyer you're getting your earnest money back because you terminated within the required amount of time and actually I'm going to give your due diligence feedback because I seller did not do something I was supposed to do whatever it may be the termination of contract by mutual agreement can be done you can do that with the release of earnest money or without so if you know let's say the buyer terminated after the expiration of due diligence in that case the seller would keep the earnest money based on the terms of the contract so though that's how you terminate the contract and it involves a writing signed by the parties so yes the buyer can just communicate to the seller that they have terminated but this can be really tricky for sellers because without the signed termination with buyer and seller the seller may think that they're free to just go under contract again they might put the property on the market and go under contract to sell the property but that old buyer came back and said oh you got bad information I didn't terminate I didn't want to terminate I never signed anything terminating the contract and now the seller's under contract to sell one home to two buyers what do you do how do you resolve that it's almost always involving either begging one of the parties to terminate or going to court so in general the way you get out of a contract is as a buyer for whatever reason you want to for a seller in the case of buyers breach making sure that you are delivering the correct terminations and that they're actually getting signed I hope that was helpful and if you want to learn more about North Carolina real estate law make sure you subscribe to the channel again I'm Tiffany Weber real estate lawyer at Thomas and Weber in Mooresville North Carolina and I'll see you in the next video thank you [Music]