This week I’m going to share with you two critically important clauses that you should be using in all of your commercial purchase agreements. It’s very common that if you’re using a standard commercial contract from a broker that neither one of these clauses will be specified and absolutely should be. Below are the actual clauses so that you can easily cut/paste them and add them to your next contract.
The PURCHASER’S Due Diligence timeframe will be for a period of 60 days and will commence when PURCHASER receives all requested Due Diligence from seller as outlined on the Due Diligence request form. After all documents and materials have been delivered to PURCHASER, PURCHASER may cancel this Agreement for any reason, at the sole discretion of PURCHASER, within sixty (60) days after receiving all documents and materials from SELLER. In the event that PURCHASER elects to cancel this Agreement during the initial 60 day inspection period this paragraph shall serve as authority to the Escrow Agent from the SELLER to act upon the “single order” of PURCHASER to distribute the Earnest money to PURCHASER. Additionally, this paragraph shall serve as the SELLER’S release of the Escrow Agent from liability for disbursing the Earnest money to PURCHASER,
PURCHASER to have a period of 30 days following above Due Diligence period to secure financing at terms acceptable to PURCHASER. PURCHASER may cancel this Agreement during this Thirty (30) day period in the event that PURCHASER does not obtain a loan approval for the purchase of the Real Estate and Personal Property that is satisfactory to PURCHASER. An automatic extension of 30 days shall be granted to PURCHASER for loan approval and funding provided LENDER provides a letter showing the loan approval and funding process is moving forward and additional time is needed to finalize the loan and funding process.
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