When does the effective date of the purchase agreement occur?

The effective date of a purchase agreement is established when the seller signs the agreement and it is delivered to the buyer. This moment signifies that both parties have officially agreed to the terms outlined in the document, which is a critical point in the transaction process. The signature of the seller indicates acceptance of the offer, and delivery to the buyer means that the buyer is now fully aware of this acceptance.

Other scenarios, such as when the buyer submits an offer, do not create an enforceable contract until the seller accepts and signs it. Verbal agreements do not typically constitute a binding contract in real estate transactions, as written agreements are generally required to specify terms clearly and protect both parties' interests. Simply providing a deposit is also not sufficient to establish an effective date, as the agreement must be signed and delivered to be considered legally binding. This clarity on the effective date is essential for determining when the terms of the agreement become operative, influencing timelines for contingencies, financing, and other critical aspects of the real estate transaction.