Understanding The Dates And Deadlines In A Real Estate Contract - Michael Phillip

Far too often we get a contract put in front of us that is so large and complex, we just end up signing and don’t even fully understand what we are agreeing to. Stop! When buying or selling a home you need to fully understand all of the terms you are agreeing too. If not, it could cost you a lot of headaches, delays, and tens of thousands of dollars! I decided to create this page to help you understand the Dates and Deadlines section of the Contract To Buy and Sell Real Estate (CBS) that we use here in Colorado.

The Dates and Deadlines section of the CBS is one of the most important sections in the contract, if not THE most important. If you miss a deadline, even by 1 minute, it could cost you things such as your earnest money, the ability to negotiate repairs, being able to challenge a property line dispute, or it can even cost you the property itself! These dates and deadlines are legally binding and missing them can put you in a breach of contract situation.

Okay, now that I’ve got your attention, you should also know that I have your back. MY SOLE JOB ONCE UNDER CONTRACT IS TO KEEP THE TRANSACTION ON TRACK AND TO SHIELD YOU FROM ANY ISSUES. So rarely do my clients even need to pay attention to the Dates and Deadlines! As I will be taking on all that stress for you.

The Dates and Deadlines are there to help keep the contract moving forward by letting all parties know when they need to submit certain items. The title company, lenders, and all agents in the transaction are all watching these dates and deadlines daily and are constantly reaching out and working with one another to make sure all items are completed on time. But that doesn’t mean you still should not know about them, and what obligations and rights you have because of them.

You can review the full Colorado Contract to Buy and Sell Real Estate (Residential) online here. But we will be discussing Section 3: Dates and Deadlines (see image on right) for this article. Each item on the dates and deadlines also has a reference section further in the CBS that will provide further details on each line item.

Let me take you through each line of the Dates and Deadlines and let you know the meaning, your rights, and the implications below.

Item #1: Time of Day Deadline

As used in this Contract, the term “day” means the entire day ending at 11:59 p.m., United States Mountain Time. Except however, if a Time of Day Deadline is specified here. If a time of day is specified here, all Objection Deadlines, Resolution Deadlines, Examination Deadlines and Termination Deadlines will end on the specified deadline date at this time of day. If Time of Day Deadline is left blank or “N/A” the deadlines will expire at 11:59 p.m., United States Mountain Time.

Item #2: Alternative Earnest Money Deadline

This is the date by which the Buyer has to deposit the earnest money, typically to a 3rd party such as the Title Company. This 3rd party will hold the funds until closing and will make sure that if there is ever any dispute, the right steps are taken prior to releasing this money to either party. The earnest money is basically a security deposit that tells the Seller that the Buyer is serious about purchasing the home. If the Buyer breaches the contract, the Seller MAY have the right to keep some, or all of this money.

Item #3: Record Title Deadline

The Record Title Deadline is the date by which the Title Company has to produce a title commitment for the current owner’s Title Insurance Policy. This will consist of presenting any plats, declarations, covenants, conditions & restrictions that can be burdening to the property. Once received, I will reach out and review this with you and answer any questions you have.

Item #4: Record Title Objection Deadline

This is the date where the buyer can object or terminate the contract if there are any issues found in the Title Commitment. If Seller does not receive Buyer’s objection notice by this date, Buyer accepts Title subject to such rights, if any, of third parties of which Buyer has actual knowledge.

Item #5: Off-Record Title Deadline

Off-Record Title are items that will not be found on a typically title search. 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).

Item #6: Off-Record Title Objection Deadline

This date is the deadline for objecting to anything disclosed by the Seller in the Off-Record Title. Buyer may terminate the contract if any unsatisfactory items are found in the Off-Record Title disclosure.

Item #7: Title Resolution Deadline

By this date, anything the Buyer has objected to concerning Title needs to be resolved. Once this date passes, Buyer can no longer object or terminate the contract due to Title concerns.

Item #8: Third Party Right to Purchase/Approve Deadline

The Right to Purchase/Approve is a contractual right granted by the owner of the property to another entity to be the first allowed to purchase a particular property if it’s offered for sale, or to approve the contract of another party to purchase. If the third-party holder of such right exercises its right, this Contract will terminate. If the third party’s right to purchase is waived explicitly or expires, or the Contract is approved, this Contract will remain in full force and effect. This is often not going to be applicable as it is not common.

Item #9: Association Documents Deadline

This is the date by which the Seller has to provide the Buyer with all of the current HOA documents pertaining to the property (if applicable). It is EXTREMELY important for Buyers to receive and review all HOA documents, especially in townhome or condo communities. This is where Buyers can find pet, architectural control, covenants, parking, and other rules and restrictions that can affect how and what you can do with this property.

Item#10: Association Documents Termination Deadline

By this date, the Buyer must either agree to all of the rules and restrictions of the HOA, or terminate the contract. 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.

Item #11: Seller’s Property Disclosure Deadline

In Colorado, Sellers are required to disclose any known material facts that might affect the property. This date should be fairly early on, as the Buyers will want to know any and all known information regarding the property up front. This is typically filled out and signed by the Seller even before the home is listed. However, Seller’s may forget or miss things, so inspections are also done to verify this information and to point out any defects or facts that the Seller may not have knowledge of.

Item #12: Lead-Based Paint Disclosure Deadline

This only applies if the subject property was built prior to 1978. If built prior to 1978, the Seller will have to present this to the Buyer stating whether or not the Seller knows if any lead-based paint (LBP) was used in or on the house. Buyer has the right to test the property for lead-based paint.

Item #13: New Loan Application Deadline

If the buyer is financing the purchase of the property, this is the date by which they have to be approved for the loan. However, in this market it is almost required that the Buyer send in their Pre-Approval Letter along with the offer, and so this this will commonly state “Completed” or “Met” in the contract.

Item #14: New Loan Terms Deadline

The New Loan Termination Deadline is for the sole benefit of the Buyer. 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. Since most buyers in this market will be pre-approved before they are writing the contract, this is often marked as N/A.

Item #15: New Loan Availability Deadline

If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer’s satisfaction with the availability of the New Loan based on the lender’s review and underwriting of Buyer’s New Loan Application (New Loan Availability). Buyer has the Right to Terminate under § 24.1., on or before the New Loan Availability Deadline if the New Loan Availability is not satisfactory to Buyer.

Item #16: Buyer’s Credit Information Deadline

This applies in the case of owner carry financing. The Buyer must supply the Seller with financials, a credit report or other documents requested. If the owner is not financing the buyer, this will be marked N/A.

Item #17: Disapproval of Buyer’s Credit Information Deadline

This only applies if the Seller will be carrying the financing of the Buyer. At this date, the Seller can decline the Buyer and terminate the contract based on the credit information the Buyer provided. If the owner is not financing the buyer, this will be marked N/A.

Item #18: Existing Loan Deadline

The Existing Loan Deadline is applicable if the Buyer is going to assume the Seller’s existing loan. The Seller must provide all current loan documents to the Buyer for review by this date. If the buyer is not assuming the Seller’s existing loan, this will be marked N/A.

Item #19: Existing Loan Termination Deadline

Only applies if the Buyer is assuming the Seller’s existing loan. The Buyer can terminate if they do not agree to all the terms and conditions of the loan they would be assuming, or if they cannot qualify for the loan. If the buyer is not assuming the Seller’s existing loan, this will be marked N/A.

Item #20: Loan Transfer Approval Deadline

This deadline applies if the Buyer is going to assume the Seller’s existing loan. This deadline is for the Seller’s Lender to approve the loan that will be assumed by the Buyer. If the buyer is not assuming the Seller’s existing loan, this will be marked N/A.

Item #21: Seller or Private Financing Deadline

This applies if the seller or another private party is going to be financing the loan to buy the property. The Buyer must decide by this date if the financing being offered is acceptable. Unless buyer is using Seller, or private, financing, this will be marked N/A.

Items #14-21 will often be marked N/A unless there is Seller Financing or the Buyer has not been fully pre-approved for a loan prior to writing the contract.

Item #22: Appraisal Deadline

The appraisal report must be complete and given to the Lender and Buyer by this date. In most cases the Lender will require an appraisal in order to determine the property’s current market value. The appraisal is often scheduled by the Buyer’s Lender and the cost is included in the buyer’s closing costs.

Item #23: 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. Buyer shall have the option to terminate this contract if the Purchase Price exceeds the Property’s valuation determined by an appraiser. Termination of this contract must be received in writing by the Appraisal Deadline. I recommend reviewing “What is an Appraisal Gap?” under my learn tab for more information on how the appraisal can affect your offer and the contract.

Item #24: 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. There are typically 3 things that can happen here, and an agreement must be reached by this date or the contract terminates:

The Seller can come down in price to match the valuation
The Buyer can bring the difference in cash
The Contract can terminate.

Item #25: New ILC or New Survey Deadline

An ILC (Improvement Land Certificate) or a Survey is typically seen with rural purchases where there is more land involved or the property is irregular. It is usually only ordered if the title company or Lender requires it, or if the Buyer has questions as to where the exact property lines are. In most urban and suburban areas this will be “N/A” on the contract.

Item #26: New ILC or New Survey Objection Deadline

If an ILC or Survey is performed, this is the deadline in which the Buyer must raise objection to the findings.

Item #27: New ILC or New Survey Resolution Deadline

If the Buyer objects to the new ILC or Survey by the New Survey Objection deadline, the Buyer must reach an agreed upon Resolution with the Seller by this deadline. If they 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.

Item #28: Water Rights Examination Deadline

If Water Rights are part of the property, the Buyer has the right to review and accept those rights by this deadline.

Item #29: Mineral Rights Examination Deadline

If Mineral Rights are part of the property, the Buyer has the right to review and accept those rights by this deadline.

Item #30: Inspection Objection Deadline

Every Buyer has the right to have a professional inspection conducted of the property. The Inspection Objection Deadline is the date by which the Seller must receive a written description of any unsatisfactory items found during the Inspection that the Buyer requires the Seller to correct. All issues must be listed along with a proposed action for the seller to remedy.

Item #31: Inspection Termination Deadline

This is the date that the Buyer has the option to terminate the contract and get their earnest money back due to concerns raised due to the Inspection of the Property. In a case where the Buyer waves the Inspection Objection and Resolution, the Buyer can still terminate the contract on this date if the Inspection report is not satisfactory.

Item #32: Inspection Resolution Deadline

By this date, the Buyer and Seller should have come to an agreement on how they plan to proceed regarding the items brought up in the Inspection Objection. Negotiating repairs or lowering the purchase price are often used in this situation. If no agreement is reached between both parties by this deadline, the contract will terminate.

Item #33: Property Insurance Termination Deadline

If there is financing required to purchase the property, the Lender will require property insurance be purchased by the Buyer. This is the date by which the Buyer should verify that their insurance company will insure the property as well as the rates and terms. The Buyer can terminate the contract and get their earnest money back if they are not comfortable with the terms of the insurance or there are any adverse effects of the insurance. For example, if the Buyer learns the property is located in a flood zone that requires flood insurance, and the insurance premiums are much higher than expected.

Item #34: Due Diligence Documents Delivery Deadline

The Seller agrees to deliver copies of specific documents pertaining to the property by this date so the Buyer can accurately do their due diligence on the property. This can include any leases, completed contract work, warranties, permits, etc.

Item #35: Due Diligence Documents Objection Deadline

If the Due Diligence Documents are unsatisfactory or not supplied by the Seller, the Buyer can terminate or object by this date.

Item #36: Due Diligence Documents Resolution Deadline

If there is an objection to the Due Diligence Documents provided by the Seller, this is the date by which the Buyer and Seller must come to an agreement on a solution. If the Buyer and Seller do not reach a resolution by the deadline, the purchase contract will automatically terminate.

Item #37: Conditional Sale Deadline

This is only applicable if the Buyer has a property to sell before they can complete the purchase of the property under contract. The Buyer may terminate the purchase contract if the current property is not sold and closed by this deadline.

Item #38: Lead-Based Paint Termination Deadline

This deadline is where the Buyer can terminate the contract and receive the return of their earnest money if they are not satisfied with the lead-based paint disclosure or the results of the lead-based paint inspection.

Item #39: Closing Date

This is when deed is transferred and loan papers are signed. All other Dates and Deadlines must be met prior to this date. After closing, the transaction is complete and the buyer can take possession at the below date and time.

Item #40: Possession Date

Typically the same day as the Closing Date. This is when the Buyers take possession of the property and the Sellers are no longer allowed on the property. It is listed separately from the Closing Date as there are some circumstances where the Buyers will not take possession at closing, such as with a Post Closing Occupancy Agreement.

Item #41: Possession Time

This is typically listed as “Following Closing” on the contract. It is the time of day when the keys are handed over to the Buyers and possession is transferred.

Item #42: Acceptance Deadline Date

The Acceptance Deadline is the date at which the offer must be accepted by the Sellers. It is typically 1-3 days following the presentation of the Buyers offer to the Sellers.

Item #43: Acceptance Deadline Time

This is the time at which the Buyers offer must be accepted by on the Date specified above in Item 42.