My purchase and sale agreement notes that both I and the seller must act in good faith. What does that mean?
That’s a good question and here is where you may want to define more specifically what constitutes good faith or conversely what actions or omissions indicate bad faith. For example, the typical agreement states that a buyer must obtain financing to purchase the home within a certain number of days and failing to do so the buyer usually has to give written notice to the seller within a certain time period. Sometimes buyers and sellers argue over whether a buyer failed to act in good faith, given that the buyer only applied to one lender. A more advisable course would be to state in the agreement, with some specificity, what applying for financing actually means. You might want such a clause to read that the buyer need only make one (or two) applications for financing to a lender for a fixed rate mortgage of thirty years (or fifteen or twenty) not to exceed an interest rate of 7.5%. Doing this strengthens the buyer’s argument that in making two such financing applications, though not re
That’s a good question and here is where you may want to define more specifically what constitutes good faith or conversely what actions or omissions indicate bad faith. For example, the typical agreement states that a buyer must obtain financing to purchase the home within a certain number of days and failing to do so the buyer usually has to give written notice to the seller within a certain time period. Sometimes buyers and sellers argue over whether a buyer failed to act in good faith, given that the buyer only applied to one lender. A more advisable course would be to state in the agreement, with some specificity, what applying for financing actually means. You might want such a clause to read that the buyer need only make one (or two) applications for financing to a lender for a fixed rate mortgage of thirty years (or fifteen or twenty) not to exceed an interest rate of 7.5%. Doing this strengthens the buyer’s argument that in making two such financing applications, though not re
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