When dealing with real estate, a ratified contract can mean different things to different people. For some people, it can be when both parties have signed off on the contract document while for others it may be when all contingencies have been removed. It really comes down to the sales contract itself and whether or not it specifies the conditions for ratification.
Knowing when a contract has been ratified is important since it signals the commencement of the end game of the sale. For buyers, they have a set time limit to finalize various aspects such as mortgage arrangements and inspections. The latter is vitally important to the seller so the contract will generally include a fairly strict timeline for inspections.
If the contract only provides seven days for inspections, the buyer must complete this process within the time period if they wish to use the inspection report to cancel the sale, or negotiate credits.
For the seller, a ratified contract is important because it sets in stone actions such as the final settlement date. This means they can effectively start to complete contractual arrangements for their new home. For real estate being traded in Washington DC, there is a Regional Sales Contract that resolves this issue. The document states that the “Date of Ratification means the date of final acceptance in writing of all the terms of this Contract”.
That’s fairly simple and straightforward. Ratifying a contract is an important part of the process of buying or selling real estate. Both parties need to be aware of the conditions that ratify a contract and what the requirements are once their contract has been ratified. As I mentioned, for many it is the end game; the hard work starts but it will soon be time to celebrate.