Contract Deadlines

Asked by Scott, Sun Apr 29, 2012

What are good rules of thumb when putting together the Contract Deadlines on a REPC. For the following:

a) Seller Disclosure Deadline
b) Due Diligence Deadline
c) Financing & Appraisal Deadline
d) Settlement Deadline

How far out should they be from when I submit the offer? How far apart should they be spaced out.

This is what I have put together. Say I submit the offer today 4/29/12
Seller disc deadline: 5/10/12
Due Diligence Deadline: 5/27/12
Financing and Appraisal Deadline: 5/20/12
Settlement Deadline: 6/5/12

What do you think?

What dates would you change around and why?

Thanks for the help.

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Janet Spencer, Agent, South Jordan, UT
Mon Apr 30, 2012
They all look great because they look like they would give all parties enough time to do what the deadline specifies, they are definitely reasonable for both a buyer and a seller, and you, the buyer picked them, so you were at least comfortable with them I assume. So as long as the seller agrees you are good to go.
The only thing I would probably reccommend if I were helping my buyer write the offer is switching the due diligence and financing and appraisal deadline, there are many offers that the buyer backs out after the inspection. The sellers also want to know you are fine with the home as soon as possible or if there are repairs you might negotiate after the inspection, there would be more time to complete them. If you get qualified and have the appraisal done, and then do your inspection and back out, you have now also got stuck for the price of the inspection in addition to the price of the appraisal, so generally the due diligence deadline comes before the financing and appraisal deadline.
The other factor I would consider, is why did you choose the June 5, for settlement? Since I don't know your circumstances then I assume you wanted that date and wanted to space things out, but if you are renting, now there is a good chance you will be paying another whole month of rent, and you will have a little more in closing costs because you will be paying interest per day from the 6th-30th (24 days) where if you select towards the end of a month like the 25th, then you are only paying closing costs from the 26th-30th (4 days), and you should be able to move out of your apartment within a couple of days and have used up your rent. So you don't waste one penny of your hard earned money.
These are just a few more "food for thought" ideas for you to consider. Good luck.
0 votes
Justin Critc…, Agent, Draper, UT
Mon Apr 30, 2012
You want to start your due diligence asap. Give your self 14-17 days to complete it but get those sellers disclosures in 3-4 days so you can review them and order your inspections from the inspector. That way if you find something that will stop you from buying the home then you may not waste your money on an appraisal. Other than that the other comments mentioned are good timelines on your dates.
p.s. why are you writing the contract yourself? Is it a FSBO? You know on the buying side if the home is listed on the MLS that my services as a buyers agent dont cost you anything right?
0 votes
Pat Kiel, Agent, SLC, UT
Mon Apr 30, 2012
I generally check with the loan officer first to be sure my dates can be met.
Most lenders will want 30 to 45 days before settlement.
5 to 7 days is adequate for Seller Disclosures.
2 to 3 weeks for your Due dliigence.
3 to 4 weeks for Financing and Appraisal.
Only use weekdays as deadlines.
I know this sounds obvious, but, you would be suprised how many people just put in numbers without looking at a calendar. This causes huge problems, especially for settlement.

Pat Kiel
Exit Realty Legacy
0 votes
Nancy S Watk…, Agent, Salt Lake City, UT
Sun Apr 29, 2012
For a non short sale home generally 4-5 days for Seller Disclosures. Many time this form is completed at the time of listing. Due dliigence 2 weeks from offer acceptance unless you know of a reason you might need to do more than a home inspection. Financing and Appraisal 3-4 weeks. If you are pre-approved the process should move quickly. If not it may take a little longer. Also it depends on what type of loan you are getting. Your lender can give you an idea of what they'd like to see. From that closing can we done within a week. Your closing date may depend on how much money you want to bring to close - less if it's at month end and more if it's the beginning of the month to cover your upfront mortgage interest.
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