iowahomeloans

In Today’s Full Doc Environment, Time is of the Essence

Posted on: August 28, 2014

Time is one of the most critical elements of a home deal. As a buyer, you want the sellers to complete their repairs and meet your terms as quickly as possible. At the same time, the sellers want you to clear your contingencies and finalize the deal as soon as possible. The longer a home deal drags out, the more uncertainty there is for both parties, and tempers can flare. You can protect your interests by writing timed deadlines into the contract, but failure to comply with these deadlines can constitute breach of contract and may nullify your home deal, or even subject you to penalties.

 

Adding Time-Sensitive Deadlines

 

Adding time-sensitive deadlines and a “time is of the essence” clause to your contract gives both buyers and sellers an incentive to move forward quickly. Alternately, you may be able to get sellers to agree to contingencies with short deadlines, when they might resist longer contingencies. Time-sensitive deadlines make it easier to plan; you can know when you can end your apartment lease, when to set up the movers and when you’ll move into your new home. They also give the seller the opportunity to do the same thing, and give both parties more confidence in a deal. But when you add time sensitive deadlines and someone runs late, it can have serious consequences.

 

Consequences of Running Late

 

At best, running over a time-sensitive deadline in your purchase contract reduces confidence in the late party, and can make tempers flare. At worst, it can constitute breach of contract, and may subject you or the seller to penalties or kill the deal entirely. If you think you’re going to run late, notify the seller. Try to negotiate a new deadline. Some sellers are understanding and may be willing to negotiate a new date, while others may use this as an excuse to kill a deal.

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