Interesting question. Many people believe that the effective date is when the last party to a contract signs. They forget about initials. If all initials are not in place, or if every party to the contract has not signed or initialed all the changes and I mean ALL the changes, there is no effective date and there is NO executed contract…period.
I was speaking to an agent the other day and they made the statement that after all signatures are in place, you have an executed contract and initials don’t matter. WRONG! Any change made MUST be initialed by ALL parties to the contract.
OK, so now all parties have signed and initialed, when is the effective date? Technically, the effective date is when the last party to the contract has signed, and/or initialed. I usually email the selling agent or listing agent and declare the effective date is so and so, (usually the day after everyone signs). I then print out the email and put it into the file and wait to see if anyone opposes that date. For the last 30+ years, no one has ever objected to my effective date, therefore it stands, as there are no objections.
Whether you use the day every one has signed/initialed or the day after, make sure someone acknowledges the effective date, either on the contract or in an email, that way there can be no argument if later on, someone disputes the date. Protect your Buyers, protect your Sellers and protect yourself by making sure the effective date is in place and acknowledged!
Until Next Monday…