The effective date is the day a contract becomes binding: when the last party signs or initials the final offer and that signed contract is delivered back. It matters because it is the origin of every deadline in the transaction. Deposits, inspection, financing and closing are all counted forward from that one date.
- Delivery completes it. Until the fully signed contract is back in the other party's hands, the clock has not started.
- Periods run in calendar days on the standard residential form, and deadlines sit at a stated hour, not at midnight.
- Commercial forms set their own periods. Quoting a residential default on a commercial deal is how a deadline gets missed.
- Write it down the day it happens and build the calendar immediately. Almost every blown deadline starts as a disagreement about this date.
A contract effective 08/04, on the residential AS IS defaults: deposit in 3 days, a 15-day inspection period, closing in 45.
Four dates, one origin. Get the origin wrong by a day and every deadline in the deal is wrong by a day with it.
Related terms
All termsInspection Period
The inspection period is the window after the effective date in which the buyer investigates the property and can cancel.
ClosingEscrow Deposit
The escrow deposit is the buyer's money, held by a neutral third party, that shows the offer is real.
ClosingTitle Commitment
A title commitment is the title insurer's written statement of the policy it will issue, and on what conditions.
Terms arrive with the writing.
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