In a perfect world, sellers would list their homes on the market, buyers would make offers, and closings would all occur in a swift and smooth manner, so that everyone walks away satisfied and happy. The reality is that numerous complications or challenges often occur on either side of a home sale transaction. One of the steps that a seller or buyer can take to overcome certain issues that might be delaying a closing is to issue a ‘notice to perform’ document.
When a buyer makes an offer on a home and the seller accepts it, they agree to certain terms. A particular agreement might have unique terms, such as a contingency, meaning that parties have agreed to close if and when certain things happen or have agreed to walk away from the deal if certain things do not happen. If the closing date is near and agreed-upon terms have not been met, a notice to perform might help get the ball rolling.
A notice to perform is a useful real estate tool
When a buyer or seller sends out a notice to perform, it basically is a warning to the other party, stating that if the terms of agreement are not met within 48 hours, the deal is null and void. For example, if closing hinges upon a buyer securing mortgage loan approval, but no obvious effort has been made to do so, the seller can issue a notice to perform. If the buyer does not fulfill the obligation within two days, the seller can walk away from the deal.
On the flipside, if a seller agreed to make certain repairs on a home following an inspection or final walkthrough and has not followed through, the buyer can issue a notice to perform, giving the seller 48 hours to fulfill the obligations or, at least, to demonstrate proof that action has been taken to schedule the work, such as if a professional contractor or repair team is being hired.
Make sure that you hire an agent who protects your interests
Whether you’re a seller or buyer, there’s a lot at stake if problems arise between the time that the offer is made and the time you go to closing. When you work with a real estate agent who has your best interests in mind, you can often avoid many of the problems mentioned in this post. Even if you do encounter challenges or delays, a top notch agent can communicate your needs to the other side and make sure that all terms of agreement are fulfilled.
An experienced agent is often able to resolve even the most complex real estate problems, so that everyone leaves the closing table feeling good about the transaction.