There are many calendaring considerations during the real estate transaction. At the risk of exaggerating, the one that gets overlooked the most and is most responsible for turning real estate dreams into nightmares is that of the Inspection Period.
Inspection Period
The Inspection Period is thought of as a time to inspect and address physical conditions of the home and property. The leaky roof and falling down gutters are top-of-mind and tend to get all the attention. What doesn’t get enough attention during this crucial period are the invisible risks represented by documents buried in Schedule II B of the preliminary title report, as well as in documents issued by Local, State, Tribal, and Federal entities memorializing rules, regulations, and laws that the owner of the property is required to abide by. These documents represent risk to the use of the property, and to the financial security of the Buyer.
Most purchase and sale agreements provide for ten days for performance of all due diligence items. Real estate best practice is for the agreement to include a Title Contingency Addendum. This Addendum gives the Buyer a specified number of days from either mutual acceptance of the agreement or the date the Buyer receives the preliminary title commitment to give written notice of the Buyer’s approval or disapproval of the preliminary title report contents. The Seller then has a certain amount of time to give the Buyer written notice that the Seller will clear all disapproved encumbrances on the property. The Seller has until the closing date to accomplish this or the agreement may be terminated.
Timely Contract Solutions
Buyers. Use TC Drafting to draft a custom document that includes a Title Contingency Addendum.
Sellers. Use TC Drafting to draft a custom document memorializing your terms, conditions, and contingencies. Reduce the risk of Buyer comeback or the contesting of a transaction.
Use Timely Contract solutions to anticipate and avoid common problems of the real estate transaction … and to sleep better at night!
This posting is not legal advice. Legal advice is based on specific facts. This information is general in nature.