Congratulations you found the home you love! Now you are ready to sign a contract, however the paperwork can be overwhelming – especially because it is 21 pages long! I'm here to help make your transaction go smoothly!
There are 39 possible deadlines in the Contact to Buy and Sell, but you don’t typically use all of them in a normal transaction. Real estate agents set the dates of the contract based on when they believe they can get the items accomplished. Keeping track of all the dates is super important. I will send you a calendar plus weekly reminders.
Before you sign the contract, if you learn what these dates mean and how they relate to other dates, it will help you tremendously!
Let’s go through each one in order to make sure you are prepared for one of the largest purchase in your lifetime.
Contract to Buy and Sell
Real Estate Contract Dates & Deadlines
Item No. 1 – Alternative Earnest Money Deadline
The Alternative Earnest Money Deadline is when the earnest money is due, usually upon offer or within 3 days of the contract be accepted. This deposit must be turned into either the Brokerage or Title Company ands needs to be either a check or wired. The amount of the deposit is usually set by the sales contract and is typically available in the MLS. The title company will cash your check. Earnest Money says you are earnestly going forward with the purchase.
Title Deadlines
Item No. 2 – Record Title Deadline
The Record Title Deadline 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 links to any plats, declarations, covenants, conditions & restrictions burdening the property. This date is usually 7-10 days from the MEC (mutually executed contract). Please be sure to read this carefully, and if you have any questions ask your realtor.
Item No. 3 – Record Title Objection Deadline
The Record Title Objection deadline allows the Buyer to object to the title condition. This is at the Buyer’s discretion and can therefore be based on any unsatisfactory title condition. This date is typically 12-15 days from the MEC.
Item No. 4 – Off-Record Title Deadline
The Off-Record Title Deadline is when the Buyer must receive copies of all existing documents in the Seller’s possession and must disclose to Buyer all easements, liens, leases, agreements or other title matters not shown by public records, of which the Seller has actual knowledge. This date is usually 10-14 days from the MEC.
Item No. 5 – Off-Record Title Objection Deadline
This is similar to the Record Title Objection. The Buyer can object & terminate if unsatisfied with documents provided in item No. 4, the Off-Record Title Deadline. This date is usually 12-15 days from the MEC.
Item No. 6 – Title Resolution Deadline
The Title Resolution Deadline is the date by which all title objections must be resolved. This date is typically 15-17 days from the MEC.
Item No. 7 – Right of First Refusal Deadline
The Right of First Refusal date applies to situations, where an outside entity, like an HOA, or a former owner has to approve a Buyer’s contract. If the entity who holds this right disapproves the contract, the contract terminates. The right of first refusal is common with a back-up offer if the contract has a contingency. This date is usually 5-7 days from the MEC.
Owner’s Association Deadlines (HOAs)
Item No. 8 – Association Documents Deadline
The Listing Agent typically handle the Association Documents (HOA documents) for the Seller. This is the deadline for which the Buyer must receive all current HOA documents.
It is VERY important for Buyers to review all documents of this nature especially in townhome or condo communities. This is where buyers can find pet, architectural control, covenants, parking, and many other rules and restrictions. Oftentimes, HOAs need appropriate time to deliver these documents. This date is typically 10-14 business days from the MEC.
Item No. 9 – Association Documents Objection Deadline
The Association Documents Objection Deadline gives the Buyer the right to terminate the contract based on any unsatisfactory provisions in the HOA docs. This date is usually 10-14 Business days from the MEC.
Seller Property Disclosure Deadline
Item No. 10 – Sellers Property Disclosure Deadline
Sellers typically complete the Seller Property Disclosure 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. This date is typically 1-3 days from the MEC.
Item No. 11 – Lead Based Paint Disclosure Deadline
The Lead Based Paint Disclosure is important only for homes built before 1978 and does not apply if the home was built after this date. A Seller agrees to deliver the lead-based paint disclosure and the EPA Brochure “Protect Your Family From Lead in your Home” to the Buyer on or before the deadline. The Buyer will then have until the mutually agreed date to terminate the contract and receive the return of their earnest money based on the disclosure. This deadline is understandably early in the contract and is usually 1-3 days from the MEC.
Loan and Credit Deadlines
Item No. 12 – New Loan Application Deadline
The Loan Application Deadline is the deadline in which the Buyer must submit a full loan application to the lender. In most cases,Buyers have usually gone through this process before submitting an offer. This date is typically 1-3 days from the MEC.
Item No. 13 – New Loan Termination Deadline
The New Loan Termination Deadline is to aid the Buyer determining whether the new loan is satisfactory to their needs. This includes payments, interest rate, terms, conditions, and cost. This deadline is for the sole benefit of the Buyer. This is usually 24-30 days from the MEC.
Item No. 14 – Buyer’s Credit Information Deadline
The Buyer’s Credit Information Deadline applies in the case of owner carry financing. The Buyer must supply the Seller with financials, a credit report or other documents requested. This deadline is usually 7-10 days from the MEC.
Item No. 15 – Disapproval of Buyer’s Credit Information Deadline
The Disapproval of Buyer’s Credit Information is the Seller’s opportunity to decline the Buyer based on the information provided. This date is typically 10-14 days from the MEC.
Item No. 16 – Existing Loan Deadline
The Existing Loan Deadline is only applicable for if the Buyer is going to assume the Seller’ existing loan. The Seller must provide all current loan documents to the Buyer for review. This deadline is typically 7-10 days from the MEC.
Item No. 17 – Existing Loan Termination Deadline
Once the Buyer receives the Seller’s current loan information, they have the right to review the terms and object or decline thereby terminating the contract. This date is usually 10-14 days from the MEC date.
Item No. 18 – Loan Transfer Approval Deadline
Again, this deadline only applies if the Buyer is going to assume the Seller’s existing loan. This is the deadline for the Seller’s Lender to approve the loan assumed by the Buyer. This deadline is typically 21-28 days from the MEC.
Item No. 19 – Seller or Private Financing Deadline
The Seller or Private Financing Deadline only applies if any portion of the financing of the transaction is provided by private or seller financing. The Buyer must decide by this date if the financing being offered is acceptable. This deadline is typically 21-28 days from the MEC.
Appraisal Deadlines
Item No. 20 – Appraisal Deadline
The Appraisal Deadline is the date in which the Buyer must receive an appraisal of the property. In most cases where there is a loan, the Lender will require an appraisal in order to determine the property’s current market value. This can be an important deadline to monitor because appraisers tend to fall behind during the busy season. This does not apply to VA loans. This deadline is typically set 18-21 days from the MEC date.
Item No. 21 – Appraisal Objection Deadline
The Appraisal Objection Deadline is when the Buyer must submit in writing that the valuation is less than the purchase price and outline the appraiser requirements of work to be done before it can close. (For example, Remove the chipped lead based paint from the side of the house). This deadline is usually set at 18-21 days from the MEC and is typically set at the same date as the Loan Termination deadline.
Item No. 22 – Appraisal Resolution Deadline
If there is an appraisal objection, the Appraisal Resolution Deadline is when the objection needs to be resolved. 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. An agreement must be reached by this date or the contract terminates. This deadline is set 21-24 days from the MEC date.
Survey Deadlines
Item No. 23 – New ILC or New Survey Deadline
An Improvement Location Certificate (ILC) or Survey is usually only ordered if the title company (and in some cases the lender) requires it, or if the Buyer has questions as to where the exact property lines are. The New ILC or New Survey Deadline outlines when the Buyer must receive either document by the deadline. This date is usually defined as 18-21 days from the MEC date.
Item No. 24 – New ILC or New Survey Objection Deadline
Item No 25 – New ILC or New Survey Resolution Deadline
If there is an ILC or Survey objection, the issue must be resolved by this date or the contract terminates. The resolution deadline must be after the objection deadline and is commonly set 21-24 days from the MEC contract date.
Inspection & Due Diligence Deadlines
Item No. 26 – Inspection Objection Deadline
The Buyer has the right to have a professional inspection done of the property. All home inspections are to be completed by this date. The Inspection Objection Deadline is the date by which the Seller must receive a written description of any unsatisfactory physical condition that the Buyer requires the Seller to correct. This is an important deadline and is typically set 7-10 days from the MEC date.
Item No. 27 – Inspection Termination Deadline
The Inspection Termination and Resolution Deadlines only pertain if an objection is sent. If an objection is received by the Buyer, the Seller has until this date to respond in writing, addressing the repair requests from the Buyer. The Buyer has to agree to the terms or the contract terminates. This date is usually set 10-14 days from the MEC and is usually the same date as the resolution.
Item No. 28 – Inspection Resolution Deadline
If an Inspection Objection is received by the Buyer, the Seller has until this date to respond in writing addressing the each of Buyer’s repair requests. If the Buyer and Seller cannot agree to the terms or agree to withdraw the objection, the contract terminates. This date is usually set 10-14 days from the MEC and is usually the same date as the inspection termination. Once an Inspection Objection is given to the seller it's in the best interest of all parties to come to a resolution in a timely manner (1-2 days). When the resolution is signed by both parties, buyers may not present any other inspection objections.
Item No. 29 – Property Insurance Termination Deadline
If there is financing required to purchase the property, the Lender will require property insurance to be obtained, commonly called homeowner’s insurance. The Property Insurance Termination Deadline is when the Buyer must obtain as many bids as they’d like for their homeowner’s insurance. If the insurance does not meet their satisfaction, they must terminate in writing by this deadline. This date is usually set 21-24 days from the MEC date.
Item No. 30 – Due Diligence Documents Delivery Deadline
In the contract, if the box is checked in the Due Diligence section, the Seller agrees to deliver copies of specific documents pertaining to the property. This can include any leases, completed contract work, warranties, permits, etc. This date is commonly set 7-10 from the MEC prior to the Inspection Objection date.
Item No. 31 – Due Diligence Documents Objection Deadline
If the Due Diligence Documents are not supplied to the Buyer, or are incomplete or unsatisfactory, the Buyer can terminate or Object. When the Buyer objects, they must provide a written description of the documents that they require the Seller to correct or supply. This date occurs 8-11 days from the MEC date.
Item No. 32 – Due Diligence Documents Resolution Deadline
If there is a Due Diligence Document Objection, the issues must be resolved or the objection retracted by the Due Diligence Documents Resolution Deadline or the contract terminates. This deadline is set after the delivery deadline and is typically 10-14 days from the MEC.
Item No. 33 – Conditional Sale Deadline
The Conditional Sale Deadline only is applicable If the Buyer has a property to sell before they can complete the purchase of the property under contract. The contingent property must be sold and closed by the conditional sale date, or the Buyer may terminate the contract. This date is flexible.
Item No. 34 – Lead-Based Paint Termination Deadline
Beginning in 2019, the Colorado Department of Regulatory Agencies added the Lead-Based Paint Termination Deadline for the Buyer to terminate the contract and receive the return of their earnest money if they are not satisfied with the lead-based paint disclosure or any of the results of the lead-based paint inspection(s). This deadline is set 10-14 days from the MEC date.
Closing & Possession Deadlines
Item No. 35 – Closing Date
Item No. 36 and No. 37 – Possession Date and Time
The Possession Date and Time is when the Buyer gets keys and the Seller is no longer allowed to enter the property. This usually the date of closing or one day after closing. If the Seller requires more time to occupy the property, a Post Closing Occupancy Agreement must be signed.
Item No. 38 and No. 39 – Acceptance Deadline Date and Time
This is the day and time in which the Buyer requires the Seller to respond to their offer. This is typically 1 day from the date of the contract. If the Seller is offering a counterproposal, a new deadline is established on the counterproposal and a new MEC will be established.
These real estate contract dates and deadlines might seem so overwhelming when reviewing the contract, but they all serve an important purpose in the negotiations of the contract.
Got questions? I'm here to help. 970-759-2540 Carrie Summers, Colorado Ranch & Home Realty.
No comments:
Post a Comment