Ultimate Guide to Contract to Close for Real Estate Investors

You’ve determined your plan to achieve financial independence and that includes investing in real estate.

You’ve evaluated all the different real estate investing strategies and selected one or two strategies that you’ll utilize on your journey toward financial independence.

You learned how to finance buying a property and studied up on how to buy your first investment property.

You’ve analyzed your deal and found a property that will move you forward toward financial independence.

You and your agent got your offer accepted and, congratulations, you’re under contract to buy your property.

Now what?

That’s what we will cover here: what happens between going under contract and when you close on the property.

We will discuss what you will be doing and what your real estate agent will likely be doing to help you get from having your offer accepted to owning the property.

Hopefully you’re reading this before you go under contract because the period called “Contract to Close” is typically a busy time for you and it is ideal to understand the process in advance.

Let’s begin.

Contracts Vary

While I’ll be covering what typically happens between going under contract and closing, keep in mind that contracts and real estate agents vary by market. Your specific contract, local customs, and unique situation may lead to differences in dates, deadlines, and processes. Always consult your real estate agent or attorney to determine what’s appropriate for your transaction.

Much of what we’ll discuss is based on common contract terms, but real estate contracts can vary quite a bit. Standard contracts differ between markets, and builders, especially in new construction, often use their own unique contracts. Your real estate agent can guide you through what’s typical in your area and help adjust to your situation.

I’ll share what I would typically do as your real estate agent or broker. However, not all agents work the same way. Yours may do more, less, or things differently. Be aware that each transaction is unique, so while I’ll provide guidelines, there’s often room for flexibility and customization based on the specifics of your deal.

Two Major Components: Due Diligence and Managing Dates and Deadlines

The period from when you go under contract to when you close on a property can be broken into two major components: due diligence and managing dates and deadlines.

Due Diligence

Due diligence refers to the research and verification you do to ensure the property meets your expectations and requirements. This is your opportunity to verify everything you assumed when making your offer. It’s the time when you dig into the details to make sure the property is what you thought it was, or if there are any issues you need to address before closing.

Managing Dates and Deadlines

Managing dates and deadlines involves keeping track of all the important milestones defined in your contract. Each deadline is tied to critical steps like submitting your earnest money, conducting inspections, and getting your financing in place.

A great real estate agent or broker will often help you stay on top of these deadlines, but ultimately you are responsible for making sure they’re met. Dates in the contract are not suggestions; they’re legally binding, and missing one can have serious consequences.

What happens if you miss a deadline? If you miss a deadline, you face the consequences. Depending on your contract, you could lose your earnest money or even be sued for specific performance and damages. That’s why it’s vital to manage each deadline closely and ensure nothing slips through the cracks.

Due Diligence

Due diligence is the process of verifying all the assumptions you made about the property before submitting your offer. It’s your opportunity to make sure everything checks out and that the property fits your expectations and needs. This includes inspections, reviewing documents, and confirming details that you couldn’t verify before going under contract.

Here are the types of due diligence you’ll typically be completing:

• HOA (Homeowners Association) – Review the HOA rules, fees, and regulations to ensure they align with your goals for the property. Are there any restrictions on renting out the property or making improvements?
• Inspection – Hire a professional to thoroughly inspect the property. You’ll want to confirm the condition of the major systems (plumbing, electrical, roof, etc.) and identify any repairs you’ll need or want to make after closing.
• Repairs – During the inspection, assess which repairs are necessary for safety or to meet your investment goals. This is also your chance to negotiate repairs with the seller, depending on your contract.
• Leases/Rents – If the property is already being rented out, review the current leases to understand the terms and rents being collected. Verify whether the tenants are in good standing and that the rents align with what you were told and your assumptions when making your offer.
• Property Value – Confirm that the property value is in line with what you expect based on market comps. This includes ensuring that the appraisal meets the contract price or verifying that your assumptions about the property’s value hold up.
• Specific Needs or Use Cases – If you have specific plans for the property—such as using it for short-term rentals, remodeling, or adding structures—verify that you can actually execute those plans under local zoning laws, building codes, or HOA restrictions.

Other Considerations

• Playing Fair – It’s important to make your offer based on what you see before submitting it. You shouldn’t use the due diligence period to negotiate on issues you already knew about when you made the offer. Use this time to verify things you couldn’t see or check beforehand.
• When Do You Verify Rent? You’ll likely do a quick check on potential rent, using your knowledge of the market or calling a property manager for an estimate, before making your offer. After your offer is accepted, dive deeper by researching rental comps and verifying rents more thoroughly during the due diligence period.
• When Do You Bring a Contractor Out to Verify Repair Costs? Typically, you’ll wait until after your offer is accepted to bring in contractors. This usually happens during the inspection period. Your contractor can give you estimates for any repairs or improvements you want to make after they’ve seen the property.
• When Do You Verify You Can Do What You Want with the HOA? HOA documents are usually provided after your contract is accepted. During the due diligence period, review the HOA rules and restrictions to ensure that your intended use for the property is allowed. You likely won’t have access to these documents before going under contract.

Dates and Deadlines: General

I’ve grouped the most common dates and deadlines into categories. For each category, we’ll explore the specific deadlines, discuss typical dates used when drafting the contract, outline what you’ll likely be doing during each phase, and explain what your real estate agent will probably be handling on your behalf.

The first group covers the dates and deadlines related to getting your offer accepted and the immediate steps following acceptance.

Acceptance Deadline

The Acceptance Deadline is an important date in your real estate contract, ensuring that the seller addresses your offer within a specific timeframe. This deadline creates a clear boundary for how long your offer remains valid and binding. Without it, the seller could delay their decision indefinitely, leaving you in limbo. The acceptance deadline keeps the process moving forward and ensures timely communication and decision-making.

Why It’s in the Contract: The Acceptance Deadline sets the time by which the seller must accept your offer. It helps both parties stay on track and protects you from waiting too long for a response. However, it’s not a deadline for rejecting your offer—if the seller wants to counter, they can do so even after the deadline, including countering the acceptance deadline itself. If the deadline passes without acceptance, your offer may become void, allowing you to move on to other opportunities.

We Often Use:

• Acceptance Date Deadline: 1 or 2 days from the time the offer is submitted. This gives the seller enough time to consider the offer but keeps the process efficient.
• Acceptance Time Deadline: We often set this at 6 PM MST to ensure everyone is clear on when the seller needs to address the offer.

What Your Real Estate Agent’s Doing: During this period, your real estate agent will stay in touch with the seller’s agent, monitoring the status of your offer, checking for any counteroffers or acceptance, and making sure nothing is left unclear as the deadline approaches.

What You’re Doing: As the buyer, you’ll want to prepare for the next steps, such as getting your earnest money ready, confirming your down payment, and ensuring your loan application is in progress. While this deadline typically applies to the seller, being prepared for what happens next is crucial because things can move quickly once the contract is accepted.

In some cases, this deadline may apply to you if the seller makes a counteroffer. Be ready to respond within the deadline to keep the process moving.

Immediately After MEC

The Mutual Execution of Contract (MEC) is a key milestone in any real estate deal. MEC refers to the moment when both you and the seller have signed the contract, making it legally binding. This is when your offer becomes official, and the clock starts ticking for all the deadlines and dates outlined in your contract.

Why It’s in the Contract: MEC serves as the cornerstone for many crucial timelines in your real estate contract. If your contract uses MEC dates rather than fixed dates, most of your deadlines—such as inspection, appraisal, and title review—are calculated from the MEC date. Otherwise, the contract may use fixed dates instead.

It’s important to know when MEC occurs because without this information, it’s easy to miscalculate deadlines.

You can find the definition of MEC in your contract. As a general rule, if you’re ever unsure what something means or how something works in your contract, check the contract itself for definitions and explanations. Most real estate contracts cover the important details, so don’t hesitate to reference it if you have questions.

After checking the contract, your next step is to ask your real estate agent or attorney for further clarification if needed.

What Your Real Estate Agent’s Doing: Once your offer is accepted and you’re officially under contract, your real estate agent will get to work on several important steps to keep the process on track:

• They’ll likely send you an email summarizing the most critical steps and info you’ll need, including:
  • A list of preferred inspectors so you can schedule your inspection as soon as possible, well before the Inspection Objection Deadline.
  • Information about earnest money—such as the amount, who to make it out to, when it’s due, and whether you’ll deliver it or have your agent deliver it for you.
• Delivering the contract to your lender for the New Loan Application Deadline. If you’ve already chosen a lender, your real estate agent can typically handle this for you, ensuring the lender gets a copy of the contract and begins securing your financing. Ultimately, you’re responsible for this, so if your agent isn’t handling it, make sure you do.

Alternative Earnest Money Deadline

The Alternative Earnest Money Deadline is the date by which you must submit your earnest money to the designated Earnest Money Holder, typically an escrow company or title company.

Earnest money is your deposit that demonstrates your serious intent to purchase the property. It acts as a financial commitment to follow through with the deal. If you miss this deadline, you could be in breach of contract, allowing the seller to terminate the agreement or pursue other actions.

Why It’s in the Contract: The Alternative Earnest Money Deadline protects both you and the seller by ensuring your financial commitment is in place early in the contract process. It provides the seller with confidence that you’re serious about the purchase, while giving you a clear timeline to fulfill your obligations. This deadline is usually set a few days after MEC to give you time to get the funds ready.

We Often Use:

• Alternative Earnest Money Deadline: MEC + 2 days. This gives you a reasonable window to get your earnest money in place after the contract is mutually executed.

What Your Real Estate Agent’s Doing:

• Your real estate agent will coordinate with you to make sure your earnest money is delivered to the Earnest Money Holder (escrow or title company) by the deadline.
• Once your earnest money is submitted, your agent will usually prepare an Earnest Money Receipt to confirm the funds have been received and provide you with documentation for your records.

What You’re Doing:

• You are responsible for getting your earnest money to the designated Earnest Money Holder. This is typically done by delivering a check, initiating a wire transfer, or using another accepted method of payment.
• In rare cases, if it’s impractical for you to deliver the earnest money yourself, you may give it to your agent, who can deliver it on your behalf. However, it’s always your responsibility to ensure the funds are submitted on time.

Dates and Deadlines: Title

Next, let’s go through the group of title related dates and deadlines.

Record Title Deadlines

The Record Title Deadlines are important dates in your real estate contract, ensuring that you have time to review the title work and address any concerns related to the property’s legal ownership. Title documents confirm that the seller has the legal right to transfer ownership to you and disclose any potential issues such as liens, easements, or covenants that could affect your use of the property. These deadlines give you the opportunity to examine the title and object if anything is not acceptable.

Why It’s in the Contract: The Record Title Deadlines protect you by giving you a clear timeframe to review the title and raise objections if there are issues that could impact your ownership or use of the property. If you are unsure or have questions, ask the title company and your attorney. Real Estate Agents are not typically trained on title and so they are not the best resource for answering title questions. If you don’t object by the deadline, it’s assumed that you’re satisfied with the title as is.

We Often Use:

• Record Title Deadline: MEC + 7 days. This is when the title company must provide the title documents for you to review.
• Record Title Objection Deadline: MEC + 14 days. This is your deadline for raising any objections to the title based on the documents provided.

What Your Real Estate Agent’s Doing:

• Sending the contract and disclosures to the title company and following up to ensure they provide the necessary title documents to you.
• Checking the title documents against a very basic, standard checklist to identify any potential issues that could impact your ownership of the property.
• Advising you on how to get additional advice from a title company or attorney if you have questions about the title documents.
• If you decide to object to something in the title, your agent will prepare a Notice of Title Objection.
• If you decide to terminate the contract based on title issues, your agent will prepare the necessary paperwork, including the Notice to Terminate and Earnest Money Release.

What You’re Doing:

• Reviewing the title work provided by the title company, which typically includes items like the title commitment, recorded easements, and any liens or encumbrances on the property.
• Asking the title company or an attorney if you have any questions or concerns about the title documents.
• Deciding how you plan to take title to the property, if you haven’t already done so at the time of the offer. This means determining the legal ownership structure of the property. For example, you might take title as an individual, or if you’re purchasing with others, you could take title as tenants in common (each person owns a specific percentage of the property) or as joint tenants (each person has equal ownership with rights of survivorship). Alternatively, you may choose to take title through an LLC or another legal entity, especially for investment purposes. Deciding how to take title can affect issues like taxes, inheritance, and liability, so consult your attorney if needed to make the best decision for your situation.
• Letting your real estate agent know if you have any objections or if you plan to terminate the contract based on the title documents.
  • If you’re objecting, you’ll sign the Notice of Title Objection.
  • If you’re terminating, you’ll sign the Notice to Terminate and Earnest Money Release.

Off-Record Title Deadlines

The Off-Record Title Deadlines are important dates in your contract that refer to any potential claims or issues with the property that are not recorded in public records but could still impact your ownership or use of the property. These can include things like unrecorded leases, easements, or options, which may not show up in the initial title search. The Off-Record Title Deadlines give you time to review any of these potential issues and object if something doesn’t align with your expectations.

Why It’s in the Contract: While a standard title search covers recorded documents, off-record matters can still affect the property and your ability to use or modify it. These deadlines ensure you have time to investigate and resolve any potential off-record issues that could impact your ownership.

We Often Use:

• Off-Record Title Deadline: MEC + 9 days. This is when the seller needs to provide any off-record title information they have about the property.
• Off-Record Title Objection Deadline: MEC + 16 days. This is the deadline for you to raise any objections based on the off-record matters provided by the seller.

What Your Real Estate Agent’s Doing:

• Forwarding any information provided by the seller regarding off-record title matters, such as leases, lease-options, unrecorded easements, or any other unrecorded agreements that could impact the property.
• If you decide to object to any off-record matters, your real estate agent will prepare the necessary paperwork, including a Notice of Title Objection.
• If you choose to terminate the contract based on off-record issues, your agent will prepare the Notice to Terminate and Earnest Money Release forms.

What You’re Doing:

• Reviewing any off-record information provided by the seller, which could include unrecorded agreements or other claims that affect the property.
• Consulting with the title company or an attorney if you need additional advice or clarification on how these off-record matters could impact your ownership or use of the property.
• Informing your real estate agent if you wish to object or terminate the contract based on these off-record matters. If you’re objecting, you’ll need to sign the Notice of Title Objection. If you’re terminating, you’ll sign the Notice to Terminate and Earnest Money Release.

Title Resolution Deadlines

The Title Resolution Deadline is the final opportunity for you to resolve any issues related to the title documents or off-record matters you’ve objected to during the contract period. This deadline is important because it gives both you and the seller time to negotiate and come to an agreement on how to handle title-related concerns. If a resolution isn’t reached by this deadline, you may need to decide whether to proceed with the purchase, terminate the contract, or accept the title as is.

Why It’s in the Contract: The Title Resolution Deadline ensures that any issues raised during the review of title documents or off-record matters are addressed within a specific timeframe. This prevents the deal from dragging on indefinitely and provides a clear point where you need to decide whether to move forward, negotiate further, or back out of the deal based on the title issues.

We Often Use:

• Title Resolution Deadline: MEC + 19 days. This gives both parties time to negotiate any title objections raised during the due diligence period.

What Your Real Estate Agent’s Doing:

• If you’ve raised any objections to the title documents or off-record matters, your agent will negotiate on your behalf to find a resolution that works for you.
• If a resolution is reached, your agent will prepare an Amend/Extend form to document any changes to the contract.
• If a resolution cannot be reached, your agent will prepare the necessary paperwork, including a Notice to Terminate and Earnest Money Release if you choose to terminate the contract.

What You’re Doing:

• You’ll need to decide whether to withdraw your objection, accept a proposed resolution from the seller, or terminate the contract based on the unresolved title issues.
• If you accept a resolution or decide to terminate, you’ll sign the Amend/Extend, Notice to Terminate, or Earnest Money Release as appropriate.

Right of First Refusal Deadline

The Right of First Refusal Deadline is a date in your contract that ensures that any party holding a right of first refusal—typically someone with a prior claim or interest in the property—has the opportunity to purchase the property before it is sold to you. This deadline is important because it prevents situations where the sale can be held up or reversed if someone else exercises their right to buy the property first.

Why It’s in the Contract: The Right of First Refusal Deadline protects you by setting a clear timeframe for resolving any rights of first refusal that could affect your purchase. It ensures that any existing right to buy the property is either waived, expired, or exercised within a certain period, so you know whether you can move forward with the purchase.

We Usually Don’t Use This, But When We Do:

• Right of First Refusal Deadline: MEC + 7 days. This is typically enough time for any party holding a right of first refusal to decide whether or not they want to exercise that right.

What Your Real Estate Agent’s Doing:

• Your real estate agent will work with the seller’s agent to get the contract either approved or the right of first refusal waived or expired.
• Your agent will also ensure you receive written notification from the seller regarding the outcome of the right of first refusal and whether you can proceed with the purchase.

What You’re Doing:

• During this time, you’re simply awaiting the results of the right of first refusal. You’ll need to wait for confirmation that any party with a right of first refusal has either waived or not exercised their right, allowing the sale to move forward.
• Having a Right of First Refusal Deadline usually means your other deadlines will be delayed as you’ll usually want this resolved before you start spending money on inspections and other due diligence.

Dates and Deadlines: Owner’s Association

The next dates and deadlines are about the HOA.

Association Documents Deadline

The Association Documents Deadline is the date by which the seller or the homeowner’s association (HOA) must provide you with the association’s governing documents, including rules, regulations, bylaws, and financial statements. These documents are critical because they outline how the HOA operates and what restrictions or requirements exist for property owners. Reviewing these documents ensures that you fully understand what living in or renting out the property under the HOA’s rules will involve.

Why It’s in the Contract: This deadline gives you a set timeframe to review the HOA’s documents and determine if the rules align with your goals for the property. It’s an important step in ensuring that the property will work for your intended use, whether it’s as a personal residence or a rental.

We Often Use:

• Association Documents Deadline: MEC + 7 days. This gives you enough time to review the HOA documents and raise any concerns early in the process.

What Your Real Estate Agent’s Doing:

• Your real estate agent will coordinate with the seller’s agent and/or the HOA to make sure you receive all necessary association documents by the deadline.
• If you have questions about the association documents, your agent will advise you on how to get additional help from a lawyer or other professional who specializes in HOA regulations.
• It’s crucial to understand that your real estate agent typically won’t review your HOA documents for you. They’re not usually trained in reviewing or providing legal opinions, including those related to HOA documents.

What You’re Doing:

• After receiving the documents, review the HOA rules, bylaws, and financials thoroughly to avoid surprises. Focus on restrictions that might affect your property use, such as limits on rentals, exterior changes, or parking. Carefully examine the financials to ensure you’re not buying into an HOA that requires additional capital from owners.

Association Documents Termination Deadline

The Association Documents Termination Deadline is the date by which you can decide to terminate the contract based on your review of the HOA’s association documents. If the rules or financial situation of the HOA don’t align with your goals for the property, this deadline allows you to exit the contract without penalty. This is a protection for you as the buyer, giving you a clear opportunity to back out if the HOA’s policies or fees are unacceptable.

Why It’s in the Contract: This deadline ensures that you have time to review the association documents thoroughly and determine if the HOA’s regulations and fees will work for your intended use of the property. If something doesn’t fit your plans, you can terminate the contract within this period and get your earnest money back.

We Often Use:

• Association Documents Termination Deadline: MEC + 10 days. This provides you with a few days after receiving the documents to review them and make an informed decision.

What Your Real Estate Agent’s Doing:

• If you decide to terminate the contract based on the association documents, your real estate agent will prepare the necessary paperwork, including a Notice to Terminate and Earnest Money Release forms, to ensure you can exit the contract and recover your earnest money.

What You’re Doing:

• You’ll be reviewing the association documents, and if you have any concerns or questions, you can seek clarification from the HOA and/or your attorney.
• If you plan to terminate the contract based on the association documents, you’ll inform your agent. If you decide to terminate, you will sign the Notice to Terminate and Earnest Money Release to officially exit the contract.

Dates and Deadlines: Seller’s Disclosures

The next dates and deadlines are about the seller’s knowledge of the property and their disclosures related to that knowledge.

Seller’s Property Disclosure Deadline

The Seller’s Property Disclosure Deadline is the date by which the seller must provide you with the Seller’s Property Disclosure (SPD). This document outlines important details about the property’s condition, including any known defects or repairs the seller has made. It helps ensure that you have all the necessary information about the property to make an informed decision before proceeding.

Why It’s in the Contract: The Seller’s Property Disclosure protects you by ensuring transparency from the seller regarding the condition of the property. It allows you to focus on potential concerns during the inspection process and decide whether the property meets your expectations. The deadline ensures that you receive this critical information early enough to address any issues.

We Often Use:

• Seller’s Property Disclosure Deadline: Often marked as “Completed” at the time of writing if you received it prior to writing the offer or set for MEC + 3 days. This gives you time to review the disclosure before proceeding with other deadlines, such as the inspection.

What Your Real Estate Agent’s Doing:

• Your agent will coordinate with the seller’s agent to get you a copy of the Seller’s Property Disclosure.
• Once the disclosure is received, your agent will forward it to you for your review, signature, and initials.

What You’re Doing:

• You’ll carefully review the Seller’s Property Disclosure before your inspection, so you can flag any areas of concern for your inspector to check. If available, consider reviewing previous Seller’s Property Disclosures to see if any issues have changed over time.
• After reviewing the document, you’ll sign and initial it to confirm receipt.

Lead-Based Paint Disclosure Deadline

The Lead-Based Paint Disclosure Deadline applies to properties built before 1978, when the use of lead-based paint was common. Federal law requires the seller to provide a Lead-Based Paint Disclosure if the home was constructed during this period. This document informs you whether the seller is aware of any lead-based paint on the property and whether any testing or remediation has been done. The purpose of this disclosure is to ensure you are aware of potential health risks associated with lead-based paint before finalizing the purchase.

Why It’s in the Contract: The Lead-Based Paint Disclosure Deadline ensures that you receive information about the possible presence of lead-based paint before you move forward with inspections or the purchase. It’s a crucial safety requirement, especially if you or future tenants may be exposed to lead hazards. This deadline ensures you have the necessary time to review and address any concerns.

We Often Use:

• Lead-Based Paint Disclosure Deadline: Often marked as “Completed” at the time of writing. This allows you to receive the disclosure early, ideally before making an offer.

What Your Real Estate Agent’s Doing:

• Your agent will coordinate with the seller’s agent to ensure you receive a copy of the Lead-Based Paint Disclosure.
• Agents often try to obtain this disclosure at the same time as writing the offer to ensure you have it as early as possible.

What You’re Doing:

• You’ll review the Lead-Based Paint Disclosure thoroughly, especially before your inspection, so you can flag any concerns related to lead-based paint for the inspector to check.
• Based on the disclosure, you will decide whether or not to proceed with your offer.
• After reviewing the document, you will sign and initial it to confirm receipt.

Dates and Deadlines: Loan and Credit

The next group of dates and deadlines focuses on financing the property, your loan, and your credit. While contracts often include additional dates and deadlines for other financing options such as owner financing and loan assumption, we’ll concentrate solely on the sections related to obtaining a new loan from a third-party lender.

New Loan Application Deadline

The New Loan Application Deadline is the date by which you must formally apply for a mortgage with your chosen lender. This ensures that the financing process begins promptly, so you can stay on track to close on the property within the contract’s timeline. Missing this deadline can jeopardize your ability to obtain the necessary financing or to object and get your earnest money back if you’re unable to get financing (or the financing you desire).

Why It’s in the Contract: This deadline is important because it ensures you don’t delay the financing process. Once you’re under contract, you need to secure financing as quickly as possible to ensure there are no issues meeting other deadlines like the appraisal or closing date. By applying for the loan early, you help ensure a smooth transaction.

We Often Use:

• Loan Application Deadline: MEC + 2 days. This gives you a short window to get your loan application started after the contract is mutually executed.

What Your Real Estate Agent’s Doing:

• If your agent knows which lender you’ve selected, your agent will send a copy of the contract and necessary disclosure documents to your lender so they can begin processing your loan application. This ensures that your lender has everything they need to start the process.

What You’re Doing:

• If you’ve been considering multiple lenders, now is the time to finalize your decision. Let your real estate agent know which lender you plan to use so they can send the necessary documents to the right place.
• If you haven’t already, complete the remaining steps of your loan application with your lender. This includes submitting personal financial documents, such as tax returns and bank statements, to support your loan request.
• Review the Loan Estimate provided by your lender to ensure you understand the costs and terms of the mortgage they’re offering.
• Be mindful of your credit throughout this period—avoid taking on new debt or making large financial changes, as these could impact your loan approval.

New Loan Objection Deadline

The New Loan Objection Deadline is the date by which you must raise any concerns or objections regarding your loan approval. If, for any reason, your loan is not approved or the terms aren’t acceptable to you, this is the last opportunity to either negotiate with the seller or back out of the contract without penalty. Missing this deadline means you could lose your earnest money if you cannot secure financing afterward.

Why It’s in the Contract: This deadline protects you by giving you a clear point to raise objections or withdraw from the contract if your loan isn’t approved or the terms are unfavorable. It ensures that financing issues are resolved before other critical steps, like the appraisal and closing. If you cannot get the loan or don’t agree to the terms, this is when you would take action to avoid losing your earnest money or being forced into a contract you can’t fulfill.

We Often Use:

• Loan Objection Deadline: MEC + 28 days. This provides a reasonable amount of time for your lender to process your loan and for you to raise any objections if needed.
  • If issues arise, this is typically the time for negotiation—either with the lender or the seller.

What Your Real Estate Agent’s Doing:

• If your lender has any outstanding loan conditions that require documentation or information, your agent will coordinate with you and the lender to provide those documents as quickly as possible.
• Your agent will check in with your lender to ensure everything is on track and that you are clear to close by this point.

What You’re Doing:

• You’ll need to work closely with your lender to ensure all final loan conditions are met. This could involve submitting additional paperwork or clarifying details with your lender.
• As the loan process nears completion, you’ll review the Closing Disclosure provided by your lender. This document outlines the final terms of your loan, including the interest rate, monthly payment, and closing costs. Make sure everything matches what you expected before moving forward.

Dates and Deadlines: Appraisal

The next group of dates and deadlines focuses on the appraisal process.

Appraisal Deadlines

The Appraisal Deadlines in your contract are critical to ensuring that the property’s value matches the purchase price, especially if you’re financing the purchase. An appraisal is required by your lender to confirm that the property’s value supports the loan amount you’re requesting. If the property appraises lower than the purchase price, you have the option to object or renegotiate with the seller.

Why It’s in the Contract: The appraisal protects both you and the lender by verifying that the property is worth what you’ve agreed to pay. If the appraisal comes in low, you may need to renegotiate with the seller or secure additional funds to cover the difference. The deadlines give a clear timeline for ordering, completing, and resolving any appraisal-related issues to keep the deal moving forward.

We Often Use:

• Appraisal Deadline: MEC + 25 days. This is when the appraisal must be completed, ensuring the lender has time to evaluate the property’s value.
• Appraisal Objection Deadline: MEC + 27 days. This is your deadline to object if the appraisal comes in lower than the purchase price.
• Appraisal Resolution Deadline: MEC + 28 days. This is the final date by which you must resolve any appraisal-related issues, whether by negotiating with the seller or deciding to move forward.

What Your Real Estate Agent’s Doing:

• Your agent will check with your lender to make sure the appraisal is ordered early, giving enough time for the appraiser to assess the property.
• Your agent will also confirm with the lender that the appraiser has visited the property, ensuring the process is on track.
• Once the appraisal is completed, your agent will receive the appraisal information from either you or the lender.
• If the appraisal comes in lower than the purchase price, your agent will prepare the necessary paperwork, including a Notice to Terminate and Earnest Money Release if you choose to walk away, or an Appraised Value Objection Notice if you intend to object and renegotiate.
• If you reach a resolution regarding a low appraisal, your agent will prepare an Amend/Extend to document the agreed-upon changes.

What You’re Doing:

• You’ll pay for the appraisal as directed by your lender.
• You’ll review the appraisal once it’s completed to ensure the property’s value supports the purchase price.
• If the appraisal comes in lower than the purchase price, you’ll decide whether to terminate the contract or object. If you choose to terminate, you’ll sign the Notice to Terminate and Earnest Money Release. If you choose to object, you’ll submit a written objection, likely through your agent.
• If you’ve reached a resolution with the seller regarding a low appraisal, you’ll sign an Amend/Extend to officially document the resolution and move forward with the transaction.

Dates and Deadlines: Survey

The next group of dates and deadlines focuses on obtaining a survey of the property.

New ILC or New Survey Deadline

The New ILC or New Survey Deadline refers to the date by which you or the seller must provide a new Improvement Location Certificate (ILC) or a new survey of the property. An ILC or survey provides detailed information about the property’s boundaries, structures, and any encroachments or easements. This ensures that both you and the lender are aware of any boundary issues or legal restrictions that could affect your ownership or future plans for the property.

Why It’s in the Contract: The New ILC or New Survey Deadline protects you by giving you a clear timeframe to ensure the property’s boundaries and any legal encroachments are understood before closing. A new survey or ILC can reveal issues such as boundary disputes, encroachments by neighbors, or easements that could affect how you use the property.

We Often Use:

• New ILC or New Survey Deadline: MEC + 21 days. This allows time for the seller to provide or for you to arrange a new ILC or survey before other critical deadlines, such as the Title Resolution Deadline.

What Your Real Estate Agent’s Doing:

• If the seller is responsible for providing the new ILC or new survey, your real estate agent will coordinate with the seller’s agent to ensure it’s completed and delivered to you by the deadline.
• If you are responsible for obtaining the new ILC or new survey, your agent will provide you with a list of surveyors and help coordinate the process to make sure it is ordered in time.

What You’re Doing:

• If you are responsible for getting a new ILC or survey, you will typically need to arrange it yourself by contacting a surveyor. Your agent will help provide recommendations and ensure it’s ordered by the deadline.

New ILC or New Survey Objection Deadline

The New ILC or New Survey Objection Deadline is the date by which you must raise any objections to the results of the Improvement Location Certificate (ILC) or survey provided for the property. This deadline gives you the opportunity to review the ILC or survey and ensure that there are no boundary disputes, encroachments, or other issues that could affect your ownership or use of the property. If any problems are found, you have until this deadline to object and potentially renegotiate the terms of the contract or terminate the agreement.

Why It’s in the Contract: The New ILC or New Survey Objection Deadline protects you by ensuring that you have enough time to review the survey results and object if any issues arise that you were not aware of when you went under contract. This could include problems like encroachments by neighbors, easements that limit your use of the property, or boundary lines that don’t match your understanding.

We Often Use:

• New ILC or New Survey Objection Deadline: MEC + 24 days. This allows you a few days after receiving the ILC or survey to review the results and raise any objections if necessary.

What Your Real Estate Agent’s Doing:

• If you decide to object based on the results of the new ILC or survey, your real estate agent will prepare the appropriate paperwork, such as:
  • A Notice to Terminate and Earnest Money Release if you choose to back out of the deal, or
  • A Title-Related Objection Notice if you want to negotiate a resolution with the seller.
• Your agent will also negotiate on your behalf to help resolve any issues uncovered by the survey, whether that means getting the seller to fix the problem or adjusting the terms of the contract.

What You’re Doing:

• If you have questions or concerns about the ILC or survey, you should consult with the surveyor or an attorney to fully understand the implications of any issues.
• You’ll need to decide whether to object based on the results of the ILC or survey and inform your agent if you wish to terminate the contract or negotiate a resolution.

New ILC or New Survey Resolution Deadline

The New ILC or New Survey Resolution Deadline is the date by which any objections raised regarding the Improvement Location Certificate (ILC) or survey must be resolved. If you have objected to something discovered in the ILC or survey—such as boundary disputes, easements, or encroachments—this deadline is when you and the seller need to come to an agreement on how to address those issues. If no resolution is reached by this deadline, you may need to decide whether to move forward with the purchase or terminate the contract.

Why It’s in the Contract: This deadline ensures that both you and the seller have a clear timeframe to resolve any issues related to the ILC or survey. Without this deadline, negotiations could drag on, potentially delaying the closing. It helps keep the transaction on track by ensuring any boundary or title-related concerns are handled in a timely manner.

We Often Use:

• New ILC or New Survey Resolution Deadline: MEC + 27 days. This gives a few days after the Objection Deadline to negotiate and reach an agreement.

What Your Real Estate Agent’s Doing:

• If a resolution has been negotiated between you and the seller regarding any objections to the ILC or survey, your real estate agent will prepare an Amend/Extend to document the resolution and withdraw the Title-Related Objection Notice.
• Your agent ensures that everything is documented correctly, so the transaction can move forward without any lingering title or boundary issues.

What You’re Doing:

• You will review the proposed resolution to determine if it is acceptable to you. This could involve adjustments made by the seller, financial compensation, or other negotiated terms.
• If the resolution is acceptable, you’ll sign the Amend/Extend and the Title-Related Objection Notice to formally document the agreement and move forward with the deal.

Dates and Deadlines: Inspection and Due Diligence

The next group of dates and deadlines focuses on property inspection and other due diligence tasks.

Inspection Objection Deadline

The Inspection Objection Deadline is the date by which you must complete your property inspection and raise any objections regarding the property’s condition. This deadline is crucial because it gives you the opportunity to identify and address any issues with the property before moving forward with the purchase. If the inspection uncovers significant problems, you can negotiate repairs, request credits, or even terminate the contract.

Why It’s in the Contract: The Inspection Objection Deadline ensures that you have a set period to evaluate the property and decide whether any issues are significant enough to object or walk away from the deal. Without this deadline, you might miss the chance to negotiate repairs or back out of the contract based on the property’s condition.

We Often Use:

• Inspection Objection Deadline: MEC + 10 days. This gives you a window to schedule the inspection, review the report, and make any necessary objections. All must be done before the deadline.

What Your Real Estate Agent’s Doing:

• Your agent will provide you with a list of qualified inspectors to help you choose one who can thoroughly evaluate the property.
• After the inspection, your agent will discuss any issues you’d like to object to and prepare an Inspection Objection if necessary.
• If you decide to accept the property “as is” without requesting repairs, your agent will prepare an Inspection Resolution to document your acceptance.

What You’re Doing:

• You’ll select an inspector and arrange for them to inspect the property before the deadline.
• You’ll also decide whether to conduct additional tests for things like radon, meth, mold, or pests, based on the property’s condition and your concerns.
• On the day of the inspection, you’ll meet the inspector at the property to go over potential concerns. During this time, you’ll want to focus on key issues, including:
  • Ensuring there are working carbon monoxide detectors.
  • Checking appliances for proper function.
  • Verifying information from the CLUE report (a report detailing any insurance claims made on the property).
  • Cross-referencing the Seller’s Property Disclosure to make sure it aligns with the property’s actual condition.
  • Reviewing the Lead-Based Paint Disclosure, if applicable.
• You should also consider ordering a sewer scope, which is strongly recommended for older properties but also beneficial for newer ones.
• Once the inspection is complete, you’ll decide whether to object to any findings or terminate the contract.
• You’ll then sign the necessary documents, whether it’s an Inspection Objection, Inspection Resolution, or Notice to Terminate and Earnest Money Release.

Inspection Termination Deadline

The Inspection Termination Deadline is the date by which you must decide whether to terminate the contract based on the results of your inspection. If the property inspection reveals significant issues and you choose not to proceed with the purchase, this is the deadline by which you must formally terminate the agreement. Terminating by this deadline allows you to exit the contract and recover your earnest money without further obligations to the seller.

Why It’s in the Contract: This deadline is a safeguard for you as the buyer. It ensures that you have a clear opportunity to walk away from the deal if the property’s condition doesn’t meet your expectations or your investment criteria. This deadline is particularly important for real estate investors, as it allows you to avoid unforeseen repair costs that could hurt your bottom line. It gives you a legal way out of the contract without risking your earnest money deposit.

We Often Use:

• Inspection Termination Deadline: MEC + 10 days. This is often the same deadline as the Inspection Objection Deadline because, at this point, you’re either going to object to certain issues or terminate the contract outright if the property doesn’t meet your standards.

What Your Real Estate Agent’s Doing:

• If you decide to terminate the contract based on the inspection results, your agent will prepare the Notice to Terminate and the Earnest Money Release. This ensures that you can exit the contract and recover your earnest money deposit.

What You’re Doing:

• If you decide to terminate, you’ll notify your agent of your decision.
• You’ll then sign the Notice to Terminate and the Earnest Money Release to officially end the contract and retrieve your earnest money.

Inspection Resolution Deadline

The Inspection Resolution Deadline is the date by which any issues raised during the inspection process must be resolved. By this deadline, you and the seller must come to an agreement regarding any repairs, credits, or price adjustments based on the property’s condition. If no resolution is reached by this date, you’ll need to decide whether to move forward with the purchase, withdraw your objections, or terminate the contract.

Why It’s in the Contract: The Inspection Resolution Deadline ensures that both parties have a clear timeframe to resolve any issues identified during the inspection. This deadline is critical because it prevents the inspection phase from dragging on indefinitely and helps keep the transaction on track. If the seller agrees to make repairs or offer credits, this deadline formalizes that agreement. For real estate investors, resolving these issues is important to ensure that the property’s condition supports your investment strategy.

We Often Use:

• Inspection Resolution Deadline: MEC + 13 days. This allows a few days after the Inspection Objection Deadline to negotiate and reach an agreement.

What Your Real Estate Agent’s Doing:

• Your agent will negotiate the inspection resolution on your behalf, discussing with the seller’s agent any necessary repairs, credits, or price reductions based on the inspection findings.
• If you decide to withdraw your inspection objection, your agent will prepare the Inspection Objection for you to sign to formally withdraw it.
• If you choose to terminate the contract based on unresolved inspection issues, your agent will prepare the Notice to Terminate and the Earnest Money Release.

What You’re Doing:

• If you decide to withdraw your inspection objection, you’ll notify your agent and sign the Inspection Objection to officially withdraw it, allowing the transaction to move forward.
• If you decide to terminate the contract due to unresolved issues, you’ll notify your agent and sign the Notice to Terminate and the Earnest Money Release to exit the contract and recover your deposit.

Property Insurance Objection Deadline

The Property Insurance Objection Deadline is the date by which you must secure satisfactory insurance for the property. If you’re unable to obtain insurance that meets your needs—due to high costs or unacceptable terms—you have the right to object and terminate the contract without penalty. This deadline ensures that you won’t be locked into purchasing a property you cannot properly insure, which is especially important for real estate investors who rely on insurance to protect their assets.

Why It’s in the Contract: This deadline is designed to protect you by ensuring that you can secure adequate insurance coverage for the property before moving forward. If issues arise—such as high premiums, insufficient coverage, or the property being uninsurable—you can terminate the contract and recover your earnest money. For investors, this is critical because insurability impacts your risk and long-term cash flow.

We Often Use:

• Property Insurance Objection Deadline: MEC + 15 days. This gives you time to gather quotes and address any concerns with the insurance company.

What Your Real Estate Agent’s Doing:

• Your agent will provide you with a list of insurance agents or companies to contact for quotes.
• If you are unable to secure acceptable insurance by this deadline, your agent will prepare the Notice to Terminate and Earnest Money Release to allow you to exit the contract without losing your deposit.

What You’re Doing:

• You will contact insurance agents or companies to obtain quotes and make sure the property can be adequately insured at a cost that works for you.
  • Be sure to inform the insurance company of any potential issues, such as an old roof, knob and tube wiring, or a swimming pool, which could affect your coverage or premiums.
  • You may also want to share the Inspection Report with your insurance company to ensure that all aspects of the property are considered in the coverage.
• If you cannot obtain satisfactory insurance, you’ll notify your agent and sign the Notice to Terminate and Earnest Money Release to terminate the contract and recover your earnest money.

Due Diligence Documents Deadlines

The Due Diligence Documents Deadlines refer to the timeline by which the seller must provide you with specific documents related to the property, and when you must review, object, or resolve any issues. These documents can include items like leases (if the property is rented), tenant estoppel statements, permits, solar panel leases, financial statements, and other materials that provide you with critical information about the property. These deadlines ensure you have the opportunity to thoroughly review the property’s details and make an informed decision before moving forward.

Why It’s in the Contract: The Due Diligence Documents Deadlines are included in the contract to give you a clear timeline to obtain and evaluate important property-related documents. For real estate investors, this information is important in determining the property’s financial viability and understanding any potential risks. If there are any concerns or inconsistencies in these documents, you have the right to object or terminate the contract.

We Often Use:

• Due Diligence Documents Delivery Deadline: MEC + 7 days. This is when the seller must deliver the required documents.
• Due Diligence Documents Objection Deadline: MEC + 10 days. This is the date by which you must raise any objections based on the information provided in the documents.
• Due Diligence Documents Resolution Deadline: MEC + 13 days. This is the final date to resolve any objections you’ve raised regarding the documents.

What Your Real Estate Agent’s Doing:

• If due diligence documents were requested, your agent will coordinate with the seller’s agent to ensure that you receive the necessary documents by the delivery deadline.
• If you find any issues with the documents and wish to object, your agent will help draft a clear description of your objections and submit them to the seller’s agent for review.
• If you change your mind about your objections or the seller resolves the issue, your agent can help withdraw the objection.
• Your agent will also negotiate with the seller on your behalf to resolve any objections.
• If the issues cannot be resolved and you decide to terminate, your agent will prepare the Notice to Terminate and Earnest Money Release for you to exit the contract.

What You’re Doing:

• You’ll carefully review the due diligence documents provided by the seller to ensure everything aligns with your expectations for the property.
• If you find any issues or have concerns, you’ll notify your agent that you want to object, and you’ll sign the description of your objection.
• If the issues are serious enough that you wish to terminate the contract, you’ll notify your agent and sign the Notice to Terminate and Earnest Money Release to recover your deposit.

Conditional Sale Deadline

The Conditional Sale Deadline is the date by which you must sell another property if your current purchase is contingent on that sale. This is commonly used when you’re buying a new property but need to sell an existing property to fund the purchase or meet other financial obligations. If your sale doesn’t go through by this deadline, you have the option to terminate the contract or negotiate an extension with the seller.

Why It’s in the Contract: The Conditional Sale Deadline protects you by ensuring that if you’re relying on the sale of another property to complete the purchase, you have a set timeframe to finalize that sale. If your other property doesn’t sell by this deadline, you can walk away from the deal without losing your earnest money, or you can negotiate an extension. For investors, this deadline is particularly important when juggling multiple transactions at once.

We Often Use:

• Conditional Sale Deadline: MEC + 30 days. This typically allows a month to complete the sale of an existing property. Often, you’re already under contract to sell your property before going under contract to buy a replacement, so this should be ample time to finalize the sale. However, if you haven’t listed your property for sale or it’s not under contract, you may need a much longer period here—with corresponding delays to all other deadlines in your purchase contract. Keep in mind that extended timelines may be challenging to negotiate, as sellers might be hesitant to accept such terms.

What Your Real Estate Agent’s Doing:

• If your current purchase is contingent on selling another property, your agent is likely also helping you sell that property to meet this deadline.
• If you’re unable to sell the property before the deadline, your agent will prepare the Notice to Terminate and Earnest Money Release, allowing you to terminate the contract without penalty.
• If there’s still potential to sell your other property, your agent will help negotiate an extension by preparing an Amend/Extend to give you additional time to complete the sale.

What You’re Doing:

• You’re working on selling the other property, ensuring that it closes before the Conditional Sale Deadline.
• If you’re unable to sell your other property in time, you’ll sign the Notice to Terminate and Earnest Money Release to exit the contract and recover your earnest money.
• If your agent successfully negotiates an extension, you’ll sign the Amend/Extend to continue the transaction while giving yourself more time to sell the other property.

Lead-Based Paint Termination Deadline

The Lead-Based Paint Termination Deadline is the final date by which you must decide whether to proceed with the purchase of a property built before 1978, based on any concerns related to lead-based paint. We already covered the importance of lead-based paint disclosures and the associated risks in a previous section. This deadline gives you the opportunity to terminate the contract if you’re uncomfortable with the risks associated with lead-based paint.

We Often Use:

• Lead-Based Paint Termination Deadline: MEC + 10 days. This provides you time to review the disclosure and any related inspection results.

What Your Real Estate Agent’s Doing:

• If you choose to terminate due to lead-based paint concerns, your agent will prepare the Notice to Terminate and Earnest Money Release.

What You’re Doing:

• If you’re terminating based on lead-based paint concerns, you’ll sign the Notice to Terminate and Earnest Money Release to officially end the contract and recover your earnest money.

Dates and Deadlines: Closing and Possession

The final group of dates and deadlines focuses on the property’s closing and transfer of possession.

Closing Date

The Closing Date is the day on which ownership of the property is officially transferred from the seller to you, the buyer. On this date, all financial transactions, including your loan funding and the transfer of funds for the property, are completed. The Closing Date marks the conclusion of the buying process and the beginning of your ownership of the property.

Why It’s in the Contract: The Closing Date ensures that both parties are working toward a specific deadline to finalize the sale. It provides a clear timeline for when the seller must vacate the property (unless there’s a post-closing occupancy agreement) and when you need to have your financing and paperwork in order.

We Often Use:

• Closing Date: MEC + 30 days. This allows time for the loan approval, inspection, appraisal, and all other necessary steps to be completed before ownership is transferred.

What Your Real Estate Agent’s Doing:

• If requested, your agent can provide you with a list of locksmiths to change the locks after closing.
• Your agent will also provide a list of utility providers so you can easily set up your utilities before the Closing Date.
• Your agent will coordinate with the seller and/or Homeowners Association (HOA) to ensure you receive any necessary keys to shared resources, such as clubhouses or pools.
• Your agent will work with your lender and the title company to ensure that the required funds are transferred on time and that all documentation is ready for the closing.
• They’ll coordinate with the title company to schedule the closing time and location and often work with the seller and their agent to finalize these details.
• Your agent will also schedule a final walk-through just before closing to confirm that the property is in the agreed-upon condition.
• They will review the Settlement Statements to ensure that any prorated expenses, such as property taxes or HOA dues, are correctly calculated, and to verify all contract details are accurate.
• If the property is a rental, your agent will ensure the Assignment of Leases is provided to the closing company to formally assign the leases to you at closing.

What You’re Doing:

• You’ll need to update your address with the post office, and if applicable, visit the post office after closing with your deed to obtain your mailbox key.
• Schedule time off from work for the closing to ensure you’re available to complete the process.
• If you’re moving into the property as a Nomad™ or house hacker, you’ll need to schedule a moving truck and make arrangements for the move.
• Decide whether you’ll change the locks yourself or hire a locksmith to do it.
• Call the utility providers and arrange for the utilities to be transferred into your name on the Closing Date. The buyer typically takes possession of the property on the day of closing unless you have a Post-Closing Occupancy Agreement with the seller.
• Wire the necessary funds for the down payment and closing costs to the title company or bring a cashier’s check to closing, as instructed by your agent or title company.
• Attend the final walk-through to confirm the property’s condition.

Possession Deadlines

The Possession Deadlines specify when you, the buyer, will officially take possession of the property. This is the point at which you gain physical access and ownership rights to the property, whether that’s immediately upon closing or at a later date if the seller has arranged for post-closing occupancy. These deadlines are important to ensure both parties understand when the handover occurs and to prevent any misunderstandings about who controls the property after closing.

Why It’s in the Contract: Possession Deadlines protect both you and the seller by clearly defining when you will take over the property. In most cases, possession happens immediately upon closing, but there are instances—like when the seller needs extra time to vacate—where a Post-Closing Occupancy Agreement is put in place. These deadlines ensure that everyone knows when the property must be vacated and when you can take full ownership and control.

We Often Use:

• Possession Date: Date and time of closing. In most transactions, you take possession as soon as the property is closed and the funds are transferred.
• Possession Time: Date and time of closing, unless otherwise specified in the contract.

We Sometimes Use:

• MEC + 60 days or less (or a specific date): If you and the seller agree to a Post-Closing Occupancy Agreement, this would allow the seller to remain in the property for a set number of days after closing (usually 60 days or less because owner-occupant financing requires you move in within 60 days), giving them extra time to vacate.

What Your Real Estate Agent’s Doing:

• Your agent will typically ensure that you gain possession at the time of closing or when the deed is delivered, whichever is specified in the contract.
• If there is a Post-Closing Occupancy Agreement, your agent will coordinate the details with the seller’s agent, ensuring the terms are clear about when the seller must vacate the property.
• Be aware that if there’s an issue with the seller vacating the property, you’ll likely need to involve an attorney. Your real estate agent isn’t trained or qualified to handle this process in case of a dispute.

What You’re Doing:

• You’ll officially receive possession of the property. This typically involves receiving the keys and any necessary access materials.

No Changing Your Mind: Objections Must Match Their Deadlines

In real estate contracts, there’s no “I changed my mind” clause. If you need to back out of the deal, you must object to a specific issue using the corresponding deadline in the contract.

For example, if you’re objecting to something found during the inspection, you need to raise that objection by the Inspection Objection Deadline. You can’t use a deadline meant for financing, like the Loan Objection Deadline, to raise inspection-related concerns. Similarly, you can’t object to a title issue using the appraisal deadline.

Each objection must be tied to its corresponding deadline, and missing those deadlines means forfeiting your right to object on those grounds.

Failure to follow these rules is considered acting in bad faith. Acting in bad faith means not adhering to the agreed-upon terms of the contract, which can lead to serious consequences. If you fail to object within the proper timeframe or for the appropriate reason, you risk losing your earnest money.

In some cases, particularly if your contract has a specific performance clause, the seller may sue you to enforce the purchase or pursue actual damages. Specific performance means the court can order you to go through with the deal, forcing you to buy the property regardless of your change of heart.

Moreover, once you’re under contract, you can’t back out just because you found a better deal elsewhere or simply decided you no longer want to purchase the property.

If you’re bound by a typical earnest money contract, you could forfeit your earnest money deposit if you walk away without a valid reason tied to a contractual deadline. While this may be worth it if you’ve found a significantly better deal, it’s not always that simple.

If your contract includes a specific performance clause, the consequences are even more severe—you could be sued to complete the purchase and potentially pay damages to the seller for any losses incurred due to your failure to close. Make sure you understand if you’re signing an earnest money contract or a specific performance contract before signing.

In short, real estate contracts require you to act in good faith, use the appropriate deadlines for objections, and be prepared to follow through on your commitments. If you don’t, the financial and legal consequences could be significant.