Real Estate Contract Time Lines Explained
When making an offer on a property, it is crucial to know your contractual timelines. These timelines will help ensure that you and the seller are happy with the deal. One of the roles of a good buyer's agent is to provide the buyer with typical time frames in a real estate offer. If your requested timelines don't make sense, the listing agent and the seller will wonder what's happening.
Before you make an offer on the house you love, let's review what is typical in most real estate contracts. Having straightforward information will increase your odds of success on the next offer presented.
What Are Common Contingencies Found in an Offer to Purchase Real Estate?
Before reviewing the expected timelines for various contingencies in a real estate contract, let's review the most common contingencies.
- When the offer is good until
- When the purchase and sale will be signed
- A home inspection contingency
- A mortgage financing contingency
- The closing date
- Miscellaneous contingencies such as a home sale clause
What Are Typical Contractual Time Lines?
When making an offer on a home, you should be putting your best foot forward. Many buyers in today's real estate market are waiving many contingencies. However, you may not be in a position to do that.
You will want to make your timeline requests as normal as possible. Let's go over what will be considered standard in the real estate industry.
Your offer will have an expiration timeframe. Most offers have a time frame of 24 hours for a response time. Sometimes they will be sooner, sometimes a little longer. It's essential to present something reasonable.
For example, asking the seller to respond in two hours would not be reasonable.
In Some States, Things Could Work a Little Differently
In some states, there are two contracts signed. An offer to purchase and a purchase and sale agreement. For example, in Massachusetts, both contracts are executed.
So when an offer is presented, you will specify when the purchase and sale agreement needs to be signed. Typically, the signing is between 10-and 14 days. Between the offer and P&S, the buyer will perform their due diligence and have various home inspections.
The home inspection time is typically 7-10 days from signing the offer to purchase. The buyer can have a general home inspection and may check for other issues such as pests, mold, radon, and water quality.
The standard mortgage contingency clause allows the buyer a specified period to get their mortgage. Usually, a normal range to get a mortgage is four to six weeks. It will often depend on the mortgage program the buyer is using.
Conventional mortgages are usually quicker than either an FHA or VA loan.
The closing is one of the more negotiable terms between the buyer and seller. The most common time frame is somewhere between 30-and 90 days.
What Affects Real Estate Contractual Time Lines?
During the process of trying to purchase a home, some things can cause delays. When they happen, the original contractual timelines will not be met.
One of the more common ones is when significant issues pop up at the home inspection. When a large problem is discovered, buyers often have to remedy a solution and the cost of fixing it.
Inspection issues can cause another round of negotiations that need to be completed before the sale can move forward.
Sometimes a lender will ask for additional documentation from a buyer. The mortgage company may need more time to grant a loan commitment when this happens.
Lastly, if there is a home sale contingency in the agreement, the buyer may need more time to sell their home. In real estate, very rarely is there ever a guarantee for anything. Common contingencies can change time frames at the drop of a hat.
How to Meet Real Estate Contract Deadlines
There are a few things you can do to try and meet contractual deadlines. Try staying on top of everything. Put all your contract time frames into a calendar on your phone. Be mindful of when the deadlines need to be met.
It's essential to check in with your lender from time to time to make sure the financing commitment is on track.
Tips For Keeping Contract Timeframes
First, be prepared to work with the seller on a timeline. This way, both parties know what they need to do to ensure the sale happens as scheduled.
Another option is to set up a meeting with your lender. Explain your situation and ask for their help in getting the sale done as soon as possible.
Working with a skilled buyer's agent is always a wise choice. They are usually expert negotiators and will have more experience helping get the sale done on time.
One of the most vital aspects of any real estate contract is all of the various time frames you've agreed to. You will want to ensure they are all realistic and can be met. Remember, the requested timelines could be the difference between scoring a house and losing out. Being flexible can often lead to nailing the place you want badly.