Let’s go over the three-day timing of attorney review. First, the reference to three days is actually a reference to three business days. You have three business days from the date on which both you and the Seller have each received a copy of the fully-signed Contract to have your attorney provide “notice” to the Seller’s attorney that you:
wish to terminate the Contract and walk away from the deal altogether, or
“disapprove” of the Contract, as written, but wish to make modifications to it that would make the Contract acceptable to you
Once the first “notice” (as described above) is sent, the three-day rule is satisfied and the timing constraint on attorney review disappears. With the first “notice,” you also preserve your right to further negotiate the terms of the Contract with the other side until a final, binding Contract is agreed-upon. This back and forth negotiation of the Contract between the parties is known as “Attorney Review.”
The counting of the three business days begins on the first business day following the date on which you and the Seller have received a copy of the fully-signed Contract, excluding weekends and holidays. It ends at the end (11:59pm) of the third business day thereafter.
Typically, your attorney will be the one to send the first notice, but there is no hard and fast rule on this. Seller’s attorney can also send the first notice in order to satisfy the three-day rule. If you choose to have your attorney cancel or terminate the Contract within the 3-day attorney review period that is your right. No explanation or justification is required, and there is no penalty or breach of Contract associated with your choice to do so. Any deposit monies you may have put down (sometimes referred to as an earnest money deposit) must be promptly returned to you.
If you choose to have your attorney “disapprove” of the Contract, as written, and propose modifications to the Contract, which would then make it acceptable to you, the negotiation and correspondence as between you and the Seller (through your respective attorneys) can continue beyond the 3-day period.
The entire time period that begins with the sending of the first notice and ends on the date when both you and the Seller agree to “conclude” attorney review, because you have agreed upon the terms of your final, binding Contract – that constitutes your Attorney Review period.
There is no outer time limit written in the form Contract during which the parties must complete Attorney Review. There is only a time constraint attached to the sending of the first notice which preserves the parties’ rights to the Attorney Review process.
It is usually in everyone’s best interests, however, to conclude attorney review quickly. Since either party can terminate the Contract during attorney review for any reason or no reason whatsoever, you, as the Buyer, are exposed to the threat of higher offers and/or Seller’s change of heart, until Attorney Review officially concludes.
3-Day Timing Examples:
- Buyer receives the fully-signed Contract on Friday, the 3-day attorney review period begins on the next business day, Monday. Monday is the first business day and the attorney review period expires at the end of the third business day, which is Wednesday.
- Buyer receives the fully-signed Contract on the Friday before Labor Day, the 3-day attorney review period begins on the next business day, Tuesday. Tuesday is the first business day and the attorney review period expires at the end of the third business day, which is Thursday.
- Seller receives the fully-signed Contract on Wednesday but Buyer does not receive a copy of the fully-signed Contract until Saturday, the 3-day attorney review period begins on the next business day, Monday. Monday is the first business day and the attorney review period expires at the end of the third business day, which is Wednesday.
- Buyer and Seller receive the fully-signed Contract on Tuesday, the 3-day attorney review period begins on the next business day, Wednesday, but Friday of that week is a holiday. Wednesday is the first business day and the attorney review period expires at the end of the third business day (excluding weekends and holidays), which is Monday.
To recap, you do not need to make all Contract modifications and finalize the Contract within three days. You do need to ensure that your attorney either sends or receives the first notice terminating or “disapproving” the Contract (whichever the case may be) within the first three business days after you and the Seller have each received a copy of the fully-signed Contract.
If not, the realtor-prepared form Contract you signed becomes legally binding, and you lose your rights to make Contract modifications by way of the Attorney Review process.
Note also that if you signed a Contract for the purchase of a home without any licensed realtors involved (for example, you are buying a home from someone you know and neither of you are represented by a real estate agent, or it is a “for sale by owner” home and you negotiated directly with the Seller, etc.), then there will be no Attorney Review provision included in your Contract unless you or the Seller specifically wrote that provision in before you signed it.
A fully-signed Contract of that nature, which was not prepared by a licensed realtor, and which does not contain an Attorney Review provision, is legally binding as soon as both parties have signed it.