How soon or late can a notice to perform be sent?
A common question that I get asked is when can a seller send a notice to perform to a buyer. if this usually comes up when a buyer’s agent receives a notice to perform from the listing agent prior to the expiration of a contingency period. Contained inside the residential purchase agreement is verbage that basically says a seller can send a notice to perform to a buyer prior to the expiration of the contingency, but no more than two days prior to the expiration. This means that if a buyer does not remove their contingencies in riding on the day of the expiration then the seller can cancel the transaction the following day. This usually happens in situations where the seller is eager to end the transaction, likely because there is a higher backup offer oh, so the seller puts pressure on the buyer to perform as soon as possible. the alternative is when the seller waits for the expiration of the contingency date to arrive, and then sends a notice to perform, which means the buyer has two additional days to remove their contingency in which the seller must wait. After that, the seller can then cancel after waiting the 2 days.
What happens if a buyer does not close escrow on time?
Sometimes I see real estate agents send a notice to perform if the buyer isn’t closing on time. For example, let’s say you’re the listing agent and the date of closing has arrived, but the buyer isn’t ready. Well, occasionally I see a notice to perform sent from the listing agent to the buyer’s agent asking the buyer to close. However, this is not the correct real estate form for this scenario. The correct form is actually a demand to close. similar to a notice to perform, a demand to close has a waiting period. That waiting.. Is 3 days as opposed to the two days of a notice to perform. This means that if a listing agent Waits until the closing date to send a demand to close, then the seller has to wait three more days after the close of escrow date in order to cancel. If there is any doubt that the buyer may not close on time, I highly recommend the seller send a demand to close to the buyer 3 days prior to the close of escrow. Again, like the notice to perform, the notice or demand can be sent prior to the expiration or closing date. However, it’s important to remember that these notices cannot be sent earlier than 2 days for a notice to perform and 3 days for demand to close, that is the earliest. The two and three day waiting periods are explicitly outlined in a residential purchase agreement, and therefore cannot be changed once the offer is signed. I should mention, however, that while an offer is drafted the number of days in that waiting. Can be modified, but I’ve noticed that and agents never do that. In summary a notice to perform can be sent 2 days prior to exploration of buyers contingencies. A demand to close can be sent 3 days prior to the closing date.
If you find yourself in a position of the listing agent and you want to pressure the buyer to adhere to strict timelines then it’s a good idea to send the nurse to perform 2 days prior to any contingency expiration, and if you have any doubt that the buyer may not close on time then to send a demand to close 3 days prior to close of escrow. And of course, these notices can be sent after the expiration or after the close of escrow date, Because unless the seller delivers one of these notices, the seller cannot cancel. The residential purchase agreement obligates the seller to deliver this notice to a buyer in order to correct their breach before cancelling. if you have any questions about a notice to perform or a demand to close please feel welcome to email info@Balboateam.com
