In a purchase transaction timing is everything.  A vast majority of deals that we work on here at HBC are purchase transactions.  A purchase transaction is based upon a purchase contract between buyer and seller that has very time sensitive deadlines.  The deadlines that are important in a purchase contract are the finance contingency date, which is usually 21-30 days after the contract is originally signed and the closing date, which is customarily 45-60 days from the original signed contract date.  Most purchase contracts require the buyer to send to escrow their earnest money deposit within 3 days of the original signed contract date.  The buyer usually has up to 30 days after the original contract date to secure their financing for the hotel purchase and also to perform their own due diligence on the property (i.e. property inspections, area market analysis, etc.). The buyer’s earnest money is 100% refundable during this 30 day finance contingency period. However, after the finance contingency date the buyer’s earnest money becomes 100% non-refundable from the seller. If after the finance contingency date the buyer cannot secure financing or if the buyer cannot close by the closing date then the seller can “walk” from the deal with all of the buyer’s earnest money deposit.  The fact that the buyer can be exposed to potential loses due to non performance of contract adds a lot of pressure to purchase deals and is something that we are keenly aware of and do not take lightly.  We ensure that our clients secure their financing quickly and well before the finance contingency date.  Secondly, we work with our clients to keep them ahead of schedule with the franchise, their entity formation, bank and franchise required insurances and many other things required to be done prior to close so we do not miss the closing date deadline as well.  We know the hotel purchase process very well and always try to keep our clients ahead of contract deadlines so our clients are not exposed to a losses and most importantly the deal is closed.

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