Contract Dates Are There for a Reason. Pay Attention!
The Residential Offer to Purchase contract (RPA) here in California is a critical document, one that is filled with deadlines that buyers, and sellers, must adhere to.
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Not paying attention to due dates, or abiding by them, can put your transaction at risk, and maybe even cost you money. I can’t provide legal advice as I am not an attorney, but I can tell you there are potential risks when a buyer or seller does not abide by contract dates.
Here are some key things you should know.
There are a number of deadlines in the contract, all of which hinge on perhaps the most important date…the date of acceptance of the buyer’s offer by the seller.
The date of acceptance starts the clock ticking, so to speak, and the deadlines for performance flow from this essential date, starting the day after.
There are specific performance deadlines to: provide buyer’s proof of funds; apply for the loan; complete the due diligence phase (e.g., property investigation), normally 17 days unless otherwise negotiated; receive the loan approval (typically 21 days unless negotiated otherwise); close escrow; and others.
Another deadline that sometimes comes into play is the Expiration of Offer deadline by which a response to the offer is due, in writing, from the seller and received by the buyer or buyer’s agent. Here in California if no date is included the expiration of the offer defaults to the 3rd day at 5 PM after the offer is signed by the buyer. It’s important to discuss the pros and cons of including a particular deadline with your agent, depending on the circumstances (e.g., multiple offers) as opposed to leaving it open.
It’s also important to know that “days” normally refers to calendar days, not business days, unless other specified, as in the case of the “3 business days” for providing the earnest money deposit to escrow.
While your agent will make sure you are aware of the appropriate due dates, it’s important for you to pay attention to the contract, keep track of deadlines, and do what’s required in a timely manner. And remember that not sticking to the deadlines can impact others, say, your lender who has some time frames of their own they must adhere to.
It’s essential, as a buyer, to understand what you are agreeing to in the contract, which is legally binding. A key part of this is knowing the deadlines and due dates, and being committed to keeping them to avoid any risk to your transaction.