Even though I won’t touch on the real estate contract line by line, time is of the essence when it comes to a Real Estate Contract, therefore, as a buyer you (really your Realtor) should be on top of the deadlines agreed on the contract. Any missed deadline means you are breaching the contract which could put any funds (if you have any) in escrow at risk, or the overall contract.
What are the most important deadlines I should be aware of?
Initial Deposit – If this is a property in high demand and you miss this deadline, the seller can use this against you and go with another offer.
Mortgage Application – The time available for you to submit your mortgage application so your loan officer can start working on the file. If you don’t get financing approval on time, the seller can later request to see when you submitted the application and use this against you to keep the funds you have in Escrow.
Inspection Period – This is the time where you will coordinate for a Home Inspector to go to the property and point out everything that is wrong with it. As long as you are in your “Inspection Period” (at least in Florida), you can cancel the contract and still be able to claim 100% of the funds you have in Escrow.
Additional Deposit – This would usually be additional funds to be deposited in Escrow after your Inspection Period has ended. If you miss this deadline, and you already have funds in Escrow, you will be putting at risk these funds.
Financing Period – This section of the contract has two parts to it if you’re taking out a mortgage to purchase the property. First, is the deadline before you have to submit the loan application to the lender (usually X days after the contract has been “Executed”). Then there is the deadline agreed on the contract in which the lender will provide the “Approval Letter” or “Commitment Letter”. There have been horror stories in which this has been overlooked, TWO deposits already collected from the buyer, and the lender does not approve the buyer on time to close on the transaction. If this ever happens, the seller has 100% claim in the funds being held in escrow.
Keep in mind, the text I mentioned above is assuming all these deadlines have been agreed on the real estate contract.
These are just some of, if not the, most important deadlines the buyer should be aware of. There is also the “Title Evidence” deadline, but that falls more into the hands of the Title Company.
Please keep in mind this should not be viewed as legal advice and if you’re currently in a legal Real Estate transaction, you should consult with your legal representative first.