Quick!!! Put out an A.P.B. on the "Date of Execution"

Okay, okay...I realize that maybe not everyone is aware of what the term "A.P.B" stands for. If you look it up at popular source Yahoo! Answers (www.yahooanswers.com), you will find that an All Points Bulletin (APB) is "a broadcast issued to several law enforcement agencies, containing information about a wanted suspect or person of interest who is to be found and/or arrested."

You will hear such terminology used in just about any police/detective show on television. Effective today, I am officially, unilaterally, making it also a real estate term. Why, you ask? Because by far, the top, undisputed issue I find when reviewing the contracts sent in with each sale is contracts missing a date of execution. I would estimate that approximately 2 out of every 5 sales contracts come in this way:

Perhaps you are wondering why this matters at all, why I'm even bothering to post on this subject. I'll tell you why, but first let's go over why this happens in the first place.

Say you represent a buyer, and after dedicated negotiations with the listing agent, you reach an agreement. You make the last set of updates on the contract and your clients sign all the paperwork that you then forward to the listing agent for the sellers' signatures. The listing agent collects their signatures, but somehow forgets to enter a date of execution in the contract. The agent then sends you a copy, and you are very busy informing your client about the next step in the process, taking the earnest money to the title company, etc., so you don't notice that the date of execution is missing from the contract.  Or perhaps you notice that the execution date is missing, but after all...isn't that the listing agent's job???

Still, you ask, why does this matter so much???? We have a signed contract, we're moving forward with inspections, everyone is happy, so who cares?  I care because I happen to know a guy by the name of Murphy who likes to show up at the most inopportune times and under the worst of circumstances.  Hopefully you also know Murphy and are familiar with Murphy's Law.

Murphy's Law says that if the date of execution is missing from the contract, chances are high that one of the following scenarios will take place:

• A major problem is identified during the inspection and the buyers want to terminate the contract.  When you go present the termination and request the release of earnest money, the listing agent informs you that you are too late to terminate, that the option period expired yesterday.  By your accounts, the option period expires today.  Who is right?
  
• Six days after receiving the signed contract, you complain to the listing agent that you still have not received the Seller's Disclosure Notice, and that they were supposed to provide the Notice within five days of the agreement.  According to the listing agent, today is the fifth day, but according to you, today is the sixth day, and thus you feel that they didn't meet their obligation as identified in Paragraph 7.b.2 of the contract.
  
• Your clients' lender informs you that they cannot obtain financing.  You present the termination and request the release of earnest money and the listing agent informs you that although the buyers may terminate for this reason, they are not entitled to the earnest money because the Third Party Financing Condition period has passed.  By your calculation, your clients had until tomorrow to terminate and receive their earnest money back.  Now your clients are upset with you because they lost their earnest money and you had told them they would be protected by the Financing Addendum.
  

In every one of these scenarios the confusion and disagreements reach such level that the issue is invariably escalated to the broker.  If I am the broker, guess what is the very first question I ask?

What is the contract date of execution?

Why?  Because without a date of execution it's pure guesswork to try to identify a correct timeline that all parties involved can agree upon.  On the other hand, if you have a date of execution, then it's extremely easy to identify the timeline and sequence of events.  It should be black and white, plain and simple, non-emotional.

In a normal sequence of events after an agreement is reached, the listing agent should write in the date of execution and then communicate to the selling agent that the contract has been executed and what that date is.

However, if for some reason that does not happen and you receive the signed contract with the date of execution missing, please, take the initiative and immediately contact the other agent to coordinate a prompt correction.

Unless, of course, you prefer to take your chances with Murphy's Law or wait for me to issue an A.P.B. for the elusive Date of Execution!