If your buyer isn’t performing, a notice to perform is a great option.
Is your buyer not performing? Let’s talk about it.
As you may know, when you go under contract with a buyer, certain contingencies are usually in place. These include things like the inspection contingency, the appraisal contingency, and the loan contingency. In a typical market, you take some time with the buyer to hammer these things out. However, our market has become so competitive that the time frame is shortened. This means inspections are being done in just five or 10 days. Appraisals are sometimes being removed. Some buyers are waiving the loan contingency to make their offer stand out.
In this fast-paced market, a lot can go wrong. Let’s say you and your buyer have agreed to a seven-day inspection period, there’s no appraisal, and the loan period is 14 days. Once the seller accepts this offer, the only party who can cancel things is the buyer. The only way the seller can cancel the transaction is if the buyer is not performing.
For example, if the previous agreement’s loan period passes after 14 days and the buyer still hasn’t held up their end, you can send them a notice to perform. If the buyer does not respond within the agreed-upon timeframe for this notice to perform, you can cancel the contract. When I first started in real estate, a notice to perform was just one day, but now it’s two.
Keep in mind that it doesn’t matter what time of day you send the notice to perform. No matter when you send your notice on a Wednesday, your buyer has until Friday at 11:59 p.m. Sometimes, two days is an eternity in our market. That’s why I recommend trying to shorten the notice period to one day if you are selling your home.
If you have any questions about today’s video, or if you have any topics you want me to talk about, please reach out to me. My team and I are always willing to help.