Blog Posts, Home Buyers, Home Sellers, Resources

Understanding Contract Deadlines

When a home Buyer makes an offer to purchase a property, and the Seller accepts their offer, the property is then considered to be “Under Contract” during the home buying/selling process (keyword: process). An “offer” to purchase a property is actually a purchase contract called a “Contract to Buy and Sell Real Estate“. The Seller can accept the Buyer’s offer by signing the purchase contract, or the Seller can counter or reject the Buyer’s offer by checking the appropriate box and initialing the purchase contract. While a Buyer and Seller are Under Contract on a property, there are many deadlines for the transaction that they are each responsible for meeting.

Deadlines are when a particular item must be completed, submitted, performed, and/or delivered by. Be aware that the purchase contract is written in favor of the Buyer, giving them numerous opportunities to terminate the purchase contract, back out of the home purchase, and still be entitled to receive their earnest money deposit back. These termination opportunities are called “Objections.” However, most of the Objection Deadlines have corresponding Resolution Deadlines. “Resolutions” are opportunities for the objection issues to be corrected or for the Buyer and Seller to re-negotiate the contract terms to satisfy both parties.

Looking at all of the deadlines in a contract for a real estate transaction can feel overwhelming. This is one of the many reasons why it is important for you to work with a Realtor. Part of a Realtor’s job is to keep the transaction on track, which involves staying on top of the deadlines to make sure that you don’t miss any and end up in default.  At the bottom of this post, you’ll find a quick reference guide to download and/or print and fill in the deadline dates for your own real estate transaction whether you are the Buyer or Seller.  Also, here is a breakdown of the different deadlines involved in a real estate transaction (listed by Item No. in the same order as they appear in the Dates and Deadlines table of section 3 of the Colorado Real Estate Commission approved Contract to Buy and Sell Real Estate – Residential):

DATES AND DEADLINES

1. Alternative Earnest Money Deadline
This is the deadline for the Buyers to deliver their Earnest Money Deposit to the title/closing company. The funds must be readily available as the title/closing company will deposit the funds into an escrow account and hold them for the Buyer to be applied to their costs at closing.

2. Record Title Deadline
This is the deadline for the title company to provide a preliminary title commitment to the Buyers for them to review the title to the property and anything that has been recorded with the county for the property. Who is responsible to pay for and order the Owner’s Title Insurance Policy is negotiable in the purchase contract.

3. Record Title Objection Deadline
This is the deadline for the Buyer to object to anything contained in the title commitment and recorded documents. The Buyers are responsible for reviewing the title commitment and should contact the title company directly with any questions or concerns pertaining to the property’s title.

4. Off-Record Title Deadline
This is the deadline for the Seller to disclose any documents or issues pertaining to the ownership and use of the property known by the Seller but not in public record (for example: a lease or easement).

5. Off- Record Title Objection Deadline
This is the deadline for the Buyer to object to any off-record title information disclosed by the Seller.

6. Title Resolution Deadline
This is the deadline by which all issues related to title objections must be resolved. If there are any clouds on the title or if the title is defective, this deadline could be extended up to the date of closing.

7. Right of First Refusal Deadline
The Right of First Refusal is a contractual right granted by the owner of the property to another entity (the Holder) to be the first allowed to purchase a particular property if it’s offered for sale. This is the deadline for the Holder to refuse to buy the property.

8. Association Documents Deadline
If the property is located within a Common Interest Community (CIC) or Home Owner’s Association (HOA), the Seller is responsible for providing all Association Documents to the Buyer by this deadline. Association Documents typically include Articles of Incorporation, By-Laws, CC&R’s (Covenant, Conditions & Restrictions), HOA Annual Budget, Monthly Financials, Last Annual Meeting Minutes (from last 6 months), Rules and Regulations, Policies and Procedures (if any), Reserve Study (if any), and Design/Architectural Guidelines (if any).

9. *Association Documents Objection Deadline
This is the deadline for the Buyer to object to anything contained in the Association Documents. The Buyers are responsible for reviewing the Association Documents and may wish to contact the HOA directly with any questions they have pertaining to the Association Documents. There is no resolution deadline for the Association Documents. If the Buyer objects to the Association Documents, their only option is to terminate the purchase.

10. Seller’s Property Disclosure Deadline
The Seller is responsible for filling out a Seller’s Property Disclosure form with their actual knowledge of the property, current as of the date of the purchase contract. The Seller must provide the Seller’s Property Disclosure to the Buyer by this deadline.

11. Loan Application Deadline
If the Buyer is obtaining financing for their home purchase, this is the deadline for them to complete a loan application with the lender of their choice.

12. *Loan Objection Deadline
If the Buyer is obtaining financing for their home purchase and the loan is not satisfactory to the Buyer, they have the right to object and terminate the purchase contract based on the availability, payments, interest rate, terms, conditions, and cost of the loan. There is no resolution deadline for the Loan. If the Buyer objects to the Loan, their only option is to terminate the purchase.

13. Buyer’s Credit Information Deadline
In the case of owner carry financing, this is the deadline for the Buyer to provide the Seller with their financials information, their credit report, etc.

14. Disapproval of Buyer’s Credit Information Deadline
In the case of owner carry financing, this is the deadline for the Seller to decline the Buyer based on the information the Buyer provided and for the Seller to terminate the purchase contract.

15. Existing Loan Documents Deadline
In the case of the Buyer assuming the Seller’s current loan on the property, this is the deadline for the Seller to provide all current loan documents to the Buyer for their review.

16. *Existing Loan Documents Objection Deadline
In the case of the Buyer assuming the Seller’s current loan on the property, this is the deadline for the Buyer to decline the Seller’s loan based on the information the Seller provided and for the Buyer to terminate the purchase contract.

17. Loan Transfer Approval Deadline
In the case of the Buyer assuming the Seller’s current loan on the property, this is the deadline for the Seller’s Lender to approve the loan assumption by the Buyer. If this deadline passes without lender approval, the purchase contract automatically terminates.

18. Seller or Private Financing Deadline
This deadline applies if any portion of the financing for the home purchase will be by seller or private financing. The Buyer or Seller must decide by this deadline if the financing being offered is satisfactory. If the financing is not satisfactory to either the Buyer or Seller, they may terminate the contract.

19. Appraisal Deadline
If the Buyer is obtaining financing for their home purchase, their lender will require an appraisal to be done to determine the property’s current market value. This is the deadline for the Buyer and Lender to receive their appraisal report, which means that the appraisal inspection must be completed prior to this date in order to allow time for the appraisal report to be completed and delivered by this deadline.

20. Appraisal Objection Deadline
If the appraised value of the property is lower than the purchase price, this is the deadline for the Buyer to object to the appraisal and appraised value of the property.

21. Appraisal Resolution Deadline
If the appraised value of the property is lower than the purchase price, the Buyer and Seller will need to re-negotiate the terms of the contract, such as lowering the purchase price of the property and/or increasing the down payment amount the Buyer will be making. This is the deadline for the Buyer and Seller to reach an agreement on the re-negotiated terms pertaining to the appraised value of the property.

22. New ILC or New Survey Deadline
If a new Improvement Location Certificate (ILC) or Survey is required for the property by either the title company or the Buyer’s lender, this is the deadline for all parties to receive the ILC or Survey by. A new ILC or Survey is usually not required with some exceptions including rural or mountain properties.

23. New ILC or New Survey Objection Deadline
If a new Improvement Location Certificate (ILC) or Survey is not satisfactory to the Buyer, this is the deadline for the Buyer to object by delivering to the Seller a written description of any matter that was to be shown or is shown in the New ILC or New Survey that is unsatisfactory and that Buyer requires Seller to correct.

24. New ILC or New Survey Resolution Deadline
If the Buyer objects to the new Improvement Location Certificate (ILC) or Survey with a New ILC or New Survey Objection, they must reach an agreed upon New ILC or New Survey Resolution with the Seller by this deadline. If the Buyer and Seller do not reach a resolution by the deadline, the purchase contract will automatically terminate unless the Buyer formally withdraws their New ILC or New Survey Objection.

25. Inspection Objection Deadline
The Buyer has the right to have a professional inspection done of the property and object to any unsatisfactory items found during the inspection by this deadline.

26. Inspection Resolution Deadline
If the Buyer objects to the inspection findings with an Inspection Objection, they must reach an agreed upon Inspection Resolution with the Seller by this deadline. If the Buyer and Seller do not reach a resolution by the deadline, the purchase contract will automatically terminate unless the Buyer formally withdraws their Inspection Objection.

27. *Property Insurance Objection Deadline
If the Buyer is obtaining financing for the home purchase, their lender will require them to have property insurance (i.e. homeowners insurance). The Buyer is responsible for doing their due diligence to research property insurance and obtain quotes. This is the deadline for the Buyer to object to the property insurance if they don’t like the rate, terms, or any additional required policy riders, such as flood insurance, etc. The only option with objecting to the property insurance is for the Buyer to terminate the contract in writing by this deadline.

28. Due Diligence Documents Delivery Deadline
If the Buyer requests any Due Diligence Documents to be provided, the Seller is responsible for providing such documents per the purchase contract by this deadline.

29. Due Diligence Documents Objection Deadline
This is the deadline for the Buyer to object to any of the Due Diligence Documents that are provided (or not provided) by the Seller.

30. Due Diligence Documents Resolution Deadline
If the Buyer objects to the Due Diligence Documents, they must reach an agreed upon Due Diligence Documents Resolution with the Seller by this deadline. If the Buyer and Seller do not reach a resolution by the deadline, the purchase contract will automatically terminate unless the Buyer formally withdraws their Due Diligence Documents Objection.

31. Conditional Sale Deadline
If the Buyer needs to sell their current property before they can complete the purchase of the new property, the Buyer may terminate the purchase contract If the current property is not sold and closed by this deadline.

32. Closing Date
This is the date the transaction must be completed and closed by.

33. Possession Date
This is the date the Seller must give possession of the property to the Buyer by. This date is often the same as the closing date unless otherwise agreed upon in the purchase contract (for example, if the Seller needs to lease the property back from the Buyer for a specified amount of time after closing).

34. Possession Time
This is the time on the Possession Date that the Seller must give possession of the property to the Buyer by. This is typically at the same time as the closing. However, the closing time is not known at the time of the purchase contract as it must be coordinated with the Buyer, Seller, their agents, and the title/closing company. Therefore, rather than give a specific time, it’s best to just say “Upon Delivery of Deed and Funding”, which basically means at the time of closing.

35. Acceptance Deadline Date
This is the deadline date for the Seller to accept the Buyer’s offer by. 

36. Acceptance Deadline Time
This is the deadline time on the Acceptance Deadline Date for the Seller to accept the Buyer’s offer by.

* These Objection Deadlines do NOT have corresponding Resolution Deadlines; the only option for these deadlines is to terminate the purchase contract.

 


* Please keep in mind that this blog post was written for Colorado (specifically the Denver Metro area) in May 2017. This information may vary in time as well as in other states and/or real estate markets.

© Briana Nickas and www.briananickas.com, 2017. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Briana Nickas and www.briananickas.com with appropriate and specific direction to the original content.

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