Today David is addressing the important timelines you must understand and stay on top of once you go under contract! He stresses that time is of essence once the contract is effective! What is an effective date you ask? An effective date is the date the contract is effective or up and running. It is the last time the last seller or buyer initials off on the last change. It is important to note that there are things that need to be taken care of before the close date and contingencies on the seller side as well as the buyer side that need to be met.
There are two main timelines that are important to understand including: inspection contingencies and financial contingencies.
Inspection contingencies in the current contract states about 15 days. If you are in a sellers market like we are now it usually gets cut down to 7-10 days. The time you start counting is the day after the effective date. It is set up based on calendar days not business days. If it ends on a Saturday/Sunday or a holiday it automatically gets pushed back to the next business day. This is something to keep in mind as the buyer because it gives you the opportunity to have more than 7 days. For example: if it ends on a Saturday then you can automatically push it to end on a Monday buying you more time.
There are no repair limits for sellers; however, buyers have the right to inspect and can cancel for any reason within the inspection period. It is important when you into contract to know what the drop dead date is because if you back out afterwards you will lose your escrow money (deposit money).
Financial contingencies is the period of time that a buyer has to get a commitment letter from the bank stating they are willing to lend them the money. If the buyer cannot get the funds or commitment letter within 30 days they can back out and get their escrow back. As a buyer it is important to know what that date is.
Make sure you know what the timelines and milestones are when you go under contract so you can stay on top of it!