In residential real estate, the Contract to Buy & Sell can be a bit confusing for first timers, especially because it’s 19 pages long. The dates & deadlines are covered even before the sales price. If you understand what those dates mean, you will understand 75% of the contract. There are 36 possible deadlines, but you usually don’t use all of them. You can find an example of the current deadline chart at the end of this blog.
Item No. 1 - Alternative Earnest Money Deadline
This is the date that your Earnest Money deposit must be turned in to either the Brokerage or Title Company. The next 7 dates are about the Title Policy.
Item No. 2 - Record Title Deadline
This is the deadline in which the Title Company must provide the Buyer, a current commitment for an owner’s title insurance policy. This will consist of copies of any plats, declarations, covenants, conditions & restrictions burdening the property. And copies of any other documents listed in the Schedule of Exceptions in the Title Commitment that was furnished to the Buyer.
Item No. 3 - Record Title Objection
The Buyer can object to the Record Title Deadline here. This can be based on any unsatisfactory title condition, in the Buyers sole discretion.
Item No. 4 - Off-Record Title Deadline
The Buyer must receive, on or before this deadline, true copies of all existing surveys in the Seller’s possession pertaining to the Property and must disclose to Buyer all easements, liens or other title matters not shown by public records, of which the Seller has actual knowledge.
Item No. 5 - Off-Record Title Objection
This is similar to the Record Title Objection. The Buyer can object & terminate if unsatisfied with documents provided in item No.4.
Item No. 6 - Title Resolution Deadline
This is the date in which all title objections must be resolved.
Item No. 7 - Right of First Refusal
This date applies to situations, where an outside entity, like an HOA, has to approve a Buyer’s contract. If the entity who holds this right, disapproves the contract, the contract terminates.
Item No. 8 - Association Documents Deadline
The Listing Agent typically handles this for the Seller. This is the deadline in which the Buyer must receive all current HOA documents. This is VERY important for Buyers to review, especially in Townhome or Condo Communities. This is where buyers can find pet, design, parking, and many other rules and restrictions.
Item No. 9 - Association Documents Objection Deadline
The Buyer has the right to terminate on or before this deadline, based on any unsatisfactory provisions in the HOA docs.
Item No. 10 - Sellers Property Disclosure Deadline
Sellers typically complete this document before listing their home for sale. This is the Sellers disclosure on any issues or improvements that they have any knowledge of pertaining to the home. There is no objection for this because it’s simply a disclosure. The Buyer will have their own inspections to get the current facts on the property.
Item No 11 - Loan Application Deadline
This is pretty self-explanatory. Buyers have usually gone through this process before submitting an offer. It’s the deadline in which the Buyer must submit a full loan application to the lender.
Item No. 12 - Loan Objection Deadline
This contract is conditional upon the Buyer determining, in Buyers sole discretion, whether the new loan is satisfactory. This includes payments, interest rate, terms, conditions and cost. This deadline is for the sole benefit of the Buyer.
Item No. 13 - Buyers Credit Information Deadline
In the case of owner carry financing, this deadline applies to the Buyer supplying the Seller with financials, a credit report, etc...
Item No. 14 - Disapproval of Buyer’s Credit Information Deadline
This is the Seller’s opportunity to decline the Buyer based on the information provided.
Item No. 15 - Existing Loan Documents Deadline
This is only applicable for assumptions; by this deadline, the Seller must provide all current loan documents to the Buyer for review.
Item No. 16 - Existing Loan Documents Deadline
Once the Buyer receives the Seller’s current loan information, they have the right to review the terms and object or decline.
Item No. 17 - Loan Transfer Approval Deadline
This only applies to assumptions; this final deadline applies to the lender approving the assumption.
Item No. 18 - Seller of Private Financing Deadline
This deadline applies if any portion of the financing of the transaction is by private or seller financing. The Buyer must decide by this date if the financing being offered is acceptable.
Item No. 19 - Appraisal Deadline
This is the date in which the Buyer must receive an appraisal of the property. It’s probably best for the Buyer Agent to communicate with the lender as the deadline approaches because appraisers tend to be behind during the busy season. This does not apply to VA loans.
Item No. 20 - Appraisal Objection Deadline
Either the appraisal matches the price or it doesn’t. By this deadline, the Buyer must submit in writing that the valuation is less than the purchase price. At this point, a couple of things can occur: a) the Seller can come down in price to match the valuation; b) the Buyer can bring the difference in cash or c) the Contract can terminate.
Item No. 21 - Appraisal Resolution Deadline
If there is an appraisal objection, the issue must be resolved by this date or the contract terminates.
Item No. 22 - New ILC or New Survey Deadline
An Improvement Location Certificate or Survey is usually only ordered if the lender requires it, or if the Buyer has questions as to where the exact property lines are. The Buyer must receive either document by the deadline.
Item No. 23 - New ILC or New Survey Objection Deadline
The date when the Seller must receive a written description of any matter that is unsatisfactory and the Buyer requires the Seller to correct.
Item No 24 - New ILC or New Survey Resolution Deadline
If there is a ILC or Survey objection, the issue must be resolved by this date or the contract terminates.
Item No. 25 - Inspection Objection
The Buyer must have all home inspections completed by this date. Seller must receive a written description of any unsatisfactory physical condition that the Buyer requires the Seller to correct.
Item No. 26 - Inspection Resolution Deadline
If an objection is received by the Buyer, the Seller has until this date to respond in writing, addressing the Buyers repair requests. The Buyer has to agree to the terms or the contract terminates.
Item No. 27 - Property Insurance Objection Deadline
Prior to this date, the Buyer must obtain as many bids as they’d like for home owner’s insurance. If the insurance does not meet their satisfaction, they must terminate in writing by this deadline.
Item No. 28 - Due Diligence Documents Delivery Deadline
If the box is checked, the Seller agrees to deliver copies of the requested documents pertaining to the property. This can include any leases, completed contract work, warranties, permits, etc.
Item No. 29 - Due Diligence Documents Objection Deadline
If the Due Diligence Documents are not supplied to the Buyer or are unsatisfactory, the Buyer can terminate or Object. If the Buyer Objects, they must deliver a written description of unsatisfactory documents that they require the Seller to correct.
Item No. 30 - Due Diligence Documents Resolution Deadline
If there is a Due Diligence Document Objection, the issues must be resolved by this date.
Item No. 31 - Conditional Sale Deadline
If the Buyer has a property to sell before they can complete the purchase, list that property here. If it is not sold and closed by this date the Buyer may terminate.
Item No. 32 - Closing Date
This is when the Seller delivers the deed to the Buyer. The Closing date is specified here or by mutual agreement. The hour and place will usually be designated by all parties.
Item No. 33 and No. 34 - Possession Date and Time
This is when the Buyer gets keys and the Seller is no longer allowed to enter the property at their own discretion. This usually occurs at closing.
Item No. 35 and No. 36 - Acceptance Deadline Date and Time
This is the day and time in which the Buyer requires the Seller to respond to their offer. If the Seller is countering, a new deadline is established on the Counterproposal.
These dates and deadlines might seem so overwhelming when reviewing the contract, but they all serve an important purpose. Read more about steps to buying a house, or steps to selling a house, or simply give me a call with your questions about buying and selling houses.