When buying or selling a property it’s critical to read the fine print and make sure all deadlines are met in a timely manner, otherwise one of the parties may end up agreeing to something they hadn’t planned. Below are three common deadlines encountered during a real estate transaction, and what can happen if the deadline is missed or ignored.
- Loan approval. Asking if the client has received loan approval for a mortgage is one of the first questions an experienced realtor asks potential buyers. Not only is the loan important to buy a property, but a general purchase agreement clearly states that if a buyer has not made an application for a loan within a specified number of days than the agreement is terminated. In some cases, the parties may come to an agreement on an extension, but to move forward with the negotiations, the buyer needs to have completed their application
- Inspection timelines. After the price and other terms have been agreed to, its time to move onto the inspections, and this is something the buyer needs to schedule as soon as possible once the offer is accepted. The purchase agreement states that a buyer has a determined number of days to schedule and respond to an inspection after the initial agreement is reached. Inspections are highly encouraged as they look at the condition of the following: HVAC, electrical, plumbing, roof, walls, foundation, floors, ceilings, basement, crawl space, well/septic, water, termites, pests, radon, mold, lead-based paint and other biological contaminants.If the inspection and response to the sellers is not completed within the number of days specified in the contract, then the buyer is agreeing to purchase the property in “as-is” condition. So unless the buyer wants to accept the house as it stands, they need to schedule their home inspection as soon as possible and send their response to the sellers immediately.
- Seller’s inspection response. Now that the inspection is complete, both parties are negotiating what additional work is needed to close the deal. On this part of the contract, if a buyer fails to reply to a request from the seller than their silence is considered acceptance by default, and the same holds true for sellers that if they do not reply to a buyer’s request than they are accepting it by default. Many times these last-minute requests have a turn around time of a day or two, which is why its so important that the realtors and clients pay close attention to the deadlines. No one wants to be stuck with a problem that could have been resolved by simply responding to the other party.
While real estate contracts and negotiations may seem tricky or complicated, the truth is much of the complexity can be remedied by clients and realtors not procrastinating. Not paying attention to the deadlines agreed upon leads to frustration for everyone, and could leave one party with a renovation, repair or problem upon which they didn’t intend to agree.