Typical Timeframes & Deadlines Table
The table below shows a typical timeline to the major events and deadlines in a real estate transaction. Each event is linked to further information in the Guide to Purchase Contract Events below the table.
The specific deadlines for events and contingencies may be different in your contract. All times are referenced from the date of mutual acceptance.
|Event / Contingency||Deadline|
|Mutual Acceptance||Starts the timeline|
|Earnest Money Deposit||2 Business Days|
|Seller's Disclosure*||3 Business Days|
|Title Review*||5 Business Days|
|HOA Review*||5 Business Days|
|Insurance Selection & Binder||7 Days After Inspection|
|Appraisal||7 Days After Inspection|
|Final Underwriting/Approval||25 Days|
|Financing Contingency||30 Days|
|Signing**||2-3 Days Prior To Closing|
* Days from receipt ** Estimated
This is official start of a contract and is important since most dates/deadlines in the contract are calculated based on the date of mutual acceptance. It happens when the contract complete with any changes is signed by all parties, and received by all parties.
Earnest Money Deposit
Earnest money is essentially the 'deposit' a buyer makes with the contract to show their level of commitment to the purchase. Earnest money is fully refundable if a buyer uses a contract contingency in a proper and timely manner to exit the contract. However, if a buyer exits or otherwise defaults on the terms of the contract without the benefit and protection of a contingency they may risk forfeiture of earnest money to the Seller. Earnest money typically must be deposited with the Selling Broker or Escrow within 2 business days of mutual acceptance.
The State of Washington requires nearly all Sellers of real estate to fully complete and deliver to the Buyer a 'Seller's Disclosure' form. The Buyer is then given 3 business days to terminate any contract if they are not satisifed with the content of the Seller's Disclosure Statement at which point earnest money would be refunded.
Typically an optional subsection of the Inspection Contingency, though it may be a separate contingency form in a contract, providing the Buyer an opportunity to investigate the neighborhood, meet their potential new neighbors, and do any other research they desire. This contingency typically provides up to 3 business days for the Buyer to object to the neighborhood for any reason and terminate the contract at which point earnest money would be refunded.
The inspection contingency is the most significant of the contract. It provides time for the Buyer to thoroughly investigate the property with a professional inspector(s) to determine the condition and suitability of the property for the Buyers plans. Prior to the expiration of this contingency, the buyer may:
Approve – if there are no concerns, they may serve notice of approval move forward to closing.
Request For Repairs/Funding For Repairs – request the seller perform work, or help fund future repairs through lowering the purchase price or paying buyer's closing costs. Like negotiating the purchase price, these negotiations can take a bit of time and go a few rounds.
Disapprove -if Buyer prefers not to buy the home, you can disapprove the inspection and terminate the contract and recieve earnest money back.
Additional Inspections – sometimes the inspector finds a significant or unusual concern which requires additional investigation. If this occurs, we will have the option of requesting additional time for investigation or analysis which may extend our inspection deadline bu up to 5 days.
If Buyer does not service notice prior to the deadline, the inspection contingency is assumed to be approved.
This is the most powerful, and easy to use contingency, in the contract. We often advise that Buyers be very serious about their purchase before waiving this contingency, because the rights of the contingencies that last longer are often more difficult to exercise.
The Buyer will have the opporunity to review the title report documents from the title insurance company which will outline any conditions of title insurance, as well as any know liens, easements or encumbrances on the property. If within 5 days of receipt of the report, the Buyer finds a condition objectionable they may service notice of their objection and request that it be cleared or otherwise remedied. If the Seller or Title insurer is not able to comply with this request within 5 days of receipt of the request then the Buyer would be given 3 days to determine whether they desire to terminate contract and receive a refund of their earnest money.
For properties with homeowner's associations, Buyers are given the opportunity to review reports on the HOA which may include bylaws, declarations, meeting minutes, reserves studies, financial statements and other documents. The Buyer has 5 days after receipt of these reports to terminate the contract and receive a refund of their earnest money based on their findings.
Insurance Selection & Binder
Most lenders require borrowers to pay for their homeowner's insurance and taxes as part of their mortgage payment, so the lender can ensure the property securing the loan is always insured and taxes are current. The lender however cannot require a borrower to use a specific insurance company, so the buyer/borrower is able to select the company of their choice. We encourage our buyers to shop for the best policy and make this selection shortly after the inspection, title and HOA review are complete. Once a policy and provider is selected, you'll want your new broker/company to send a 'binder' to your lender so the terms can be reviewed, and costs integrated into your loan.
Shortly after the resolution of any inspection contingency, title reviews and HOA reviews, we'll ask the lender to order and complete the appraisal. It's important the appraisal is only ordered and completed after these continengies since once the appraisal is completed you'll be responsible for paying for it, even if you back out the contract due to the inspection, title or HOA reviews.
The appraisal is required by the bank to verify the condition and value of the property is sufficient to be proper collateral for your loan. Most of the time, appraisals will report values equal to or slightly above the mutually accepted sales price in the contract.
However, an appraisal may return with a low value or required repairs. If this happens, buyers and their earnest money are protected by the terms of the financing contingency. The financing contingency allows the buyer and seller to challenge the appraisal, renegotiate the terms of the contract or cancel the contract if a resolution cannot be reached. If the contract is cancelled due to appraisal issues using the terms of the financing contingency the buyer's earnest money would be returned.
Once the appraisal is complete, and the insurance binder has been received, a lender will move the file to final underwriting for full approval of the loan. The lender may require the buyer to provide updated documents for the loan, and it's imperative to provide these as quickly as possible to avoid complications or delays. Once a loan receives final approval, loan documents can be drawn up and sent to escrow for signing.
The most lengthy, and only non-automatically expiring, contingency typically in a contract, the Financing Contingency protects the buyer by ensuring the buyer can get the loan they want for the property. The buyer has time apply for a loan, get an appraisal and do other required work to obtain final approval for their loan in preparation for closing. Typically Buyers will have up to 30 calendar days, before the Seller can request they waive this contingency or terminate the contract.
While this contingency is active if the Buyer fails to obtain financing due to inability to qualify for a loan or low appraised value of the property, they may excercise this contingency to exit the contract and receive a refund of their earnest money.
Signing & Deposit of Funds To Close
In Washington State, Buyers and Sellers typically sign final contractual and loan documents 2-3 business days prior to the scheduled date of closing. This event often takes place at an escrow company office during normal business hours, and Buyers are expected to have any necessary funds to close the transaction ready in the form of a cashier's check or wire transfer instructions.
The finalization of the contract and transfer of ownership is executed by the escrow company on the date of closing. Typically, this occurs between 11am and 5pm and is made official by the receipt of the recording numbers of the documents from the county.