When you give the buyers a notice to perform on removal of contingency's, how long should you give them in ca. if its 2 days is that 2 business days?

Asked by , Sat Jan 5, 2013

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6
Terry G Hunt…, , Newport Coast, CA
Sat Jan 5, 2013
BEST ANSWER
Sharin:

Thanks for your inquiry:

First as to your question about business days vs calendar days...
Para 22E of the Purchase Agreement (RPA-CA) defines "days" as calendar days.
However, if the last day for performance falls on a Sat, Sun, or legal holiday, then the last day for performance is the next day which is not a Sat,Sun, or legal holiday.

The number of days pre-printed in the RPA-CA is at least 2 days. A different (higher) number of days can be filled in. So, unless a greater number of days is filled in on the RPA-CA, the buyer has 2 days to perform after receiving the notice to perform.

When the notice period is the pre-printed 2 days...
Although most agents (and incredibly, even some professional transaction coordination companies/individuals, who should really be the "go-to" people for doing it per the contract) don't do it, it is nevertheless a good idea to notice the buyer 2 days before the performance date in the RPA-CA. This is the maximum time before the deadline that notice can be given. So, if you give notice 2 days before the performance is due, then performance would be due as scheduled. If you wait until the performance is due to give the notice, then you are effectively extending the period by 2 days.

The language in the Notice to Buyer to Perform is harsh, and this is probably why many agents/transaction coordinators don't use it. My suggestion is to add a cover letter telling the buyer/buyer agent that the "buyer is not in breach, and to please excuse the harsh language in the required pre-printed form. Giving the notice is just an administrative requirement per para 14.B(3) of the purchase agreement (RPA-CA) ."

Many agents consider doing this excessive. I do not. My last two transactions have hinged on technicalities.
1. Million-dollar + range: Seller accepted an offer from another buyer and the listing agent told the buyer that his client had the deal. However, the signed paperwork was not returned that evening to the buyer broker. My client's higher offer came in the next day, and my client ended up with the property, to the chagrin of the other "aced-out" buyer. A mere technicality, but it won the property for my buyer, and lost it for the other buyer.
2. Another buyer representation: Negotiations had been on-going with several buyers (multiple counter-offers) for about 3 weeks. Finally, the seller agent/ Seller decided to accept my buyer's offer, after all. They signed the counter & signed the main contract, but neglected to sign the confirmation required in a multiple counter-offer situation. I insisted that the confirmation be signed even though we were well-past the original deadlines, and they had eliminated all the other current buyers. Just one day later, the listing agent received an all-cash offer from another buyer, an offer that would have paid the listing agent both sides of the the commission.
She complained about the situation to me, so I leave it to you to guess the alternative outcome if there were a way to cancel out my buyer (which there would have been, absent the seller's confirmation signature, or even if the confirmation had been delayed even one single day more)!

"Little hinges swing big doors"... it's important to take care of the details. They mean nothing, until they mean EVERYTHING in the transaction.

Hope this helps,
Terry
3 votes
Hello there. Loved your article. If I received on a Friday after hours (tonight), when it is officially ok for the seller to literally try to cancel. Meaning, when is the time up? Thank you!
Flag Fri Aug 26, 2016
Very valuable information. Thank You!
Flag Fri May 10, 2013
Rene Ferland, Agent, Danville, CA
Fri Dec 4, 2015
What happens if you deliver the notice of 2 days on a Friday evening?
Do they have until Tuesday evening?
0 votes
Ingrid Ski R…, Agent, Mission Viejo, CA
Sun Jan 6, 2013
On the notice to perform or should say
And gives you a place to put in how many days. 2 days or your
Did you read the contract? You should be talking with your agent or their broker about the contract you have signed

Ingrid Ski Realtor
949-874-0432
OCAreaHomes@yahoo.com
0 votes
Terry G Hunt…, , Newport Coast, CA
Sat Jan 5, 2013
Sharin:

Thanks for your inquiry:

First as to your question about business days vs calendar days...
Para 22E of the Purchase Agreement (RPA-CA) defines "days" as calendar days.
However, if the last day for performance falls on a Sat, Sun, or legal holiday, then the last day for performance is the next day which is not a Sat,Sun, or legal holiday.

The number of days pre-printed in the RPA-CA is at least 2 days. A different (higher) number of days can be filled in. So, unless a greater number of days is filled in on the RPA-CA, the buyer has 2 days to perform after receiving the notice to perform.

When the notice period is the pre-printed 2 days...
Although most agents (and incredibly, even some professional transaction coordination companies/individuals, who should really be the "go-to" people for doing it per the contract) don't do it, it is nevertheless a good idea to notice the buyer 2 days before the performance date in the RPA-CA. This is the maximum time before the deadline that notice can be given. So, if you give notice 2 days before the performance is due, then performance would be due as scheduled. If you wait until the performance is due to give the notice, then you are effectively extending the period by 2 days.

The language in the Notice to Buyer to Perform is harsh, and this is probably why many agents/transaction coordinators don't use it. My suggestion is to add a cover letter telling the buyer/buyer agent that the "buyer is not in breach, and to please excuse the harsh language in the required pre-printed form. Giving the notice is just an administrative requirement per para 14.B(3) of the purchase agreement (RPA-CA) ."

Many agents consider doing this excessive. I do not. My last two transactions have hinged on technicalities.
1. Million-dollar + range: Seller accepted an offer from another buyer and the listing agent told the buyer that his client had the deal. However, the signed paperwork was not returned that evening to the buyer broker. My client's higher offer came in the next day, and my client ended up with the property, to the chagrin of the other "aced-out" buyer. A mere technicality, but it won the property for my buyer, and lost it for the other buyer.
2. Another buyer representation: Negotiations had been on-going with several buyers (multiple counter-offers) for about 3 weeks. Finally, the seller agent/ Seller decided to accept my buyer's offer, after all. They signed the counter & signed the main contract, but neglected to sign the confirmation required in a multiple counter-offer situation. I insisted that the confirmation be signed even though we were well-past the original deadlines, and they had eliminated all the other current buyers. Just one day later, the listing agent received an all-cash offer from another buyer, an offer that would have paid the listing agent both sides of the the commission.
She complained about the situation to me, so I leave it to you to guess the alternative outcome if there were a way to cancel out my buyer (which there would have been, absent the seller's confirmation signature, or even if the confirmation had been delayed even one single day more)!

"Little hinges swing big doors"... it's important to take care of the details. They mean nothing, until they mean EVERYTHING in the transaction.

Hope this helps,
Terry
0 votes
Carol Lee, Agent, Corona del Mar, CA
Sat Jan 5, 2013
Hi Sharin,

You'll need to look up the amount of time given on the purchase agreement (RPA). If you do not have a copy, ask your agent for one.

If the agreement says 2 days, it's 2 days - in the CA RPA all days count the same unless otherwise specified.

Hope that your buyer steps up and performs and that you close escrow on time.

With best regards,


Carol Lee
Surterre Properties

949.395.3994
clee@surterreproperties.com

http://www.newportism.com
0 votes
Alain Picard, Agent, Puyallup, WA
Sat Jan 5, 2013
I know out in Washington if it's less than 5 days then it is counted in business days.
0 votes
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