Without making this too complicated, here’s a brief outline of the timelines, as agreed to in a normal, boilerplate contract.
- Time for Acceptance – This is the time that the buyer is on the line for the contract, if signed and received within that time. This is not a “response” time, despite what most believe.
- Contract start – Once all parties have received the signed offers/counters, and everyone is on the same page, day one of your timelines starts the next day. The buyer is entitled to FULL days for their inspection, which is why the next calendar day after a signed offer starts the clock.
- Sellers Disclosure – Currently, the seller has 3 days to get the disclosures completed and over to the buyer. Any changes would be done to a revised copy of the disclosures.
- Buyer’s review of disclosures- A buyer has 5 days to review anything sent to them, that includes the sellers disclosure, the claims loss history for insurance, the lead based paint disclosure, Title preliminary report and any HOA disclosures. This means you have 5 full days to review the items, and if there is something you disapprove of, you may cancel, stating the reason, and receive the earnest back.
- Examples – If the title search shows that there is an easement on the land, there was a flood on the insurance claims, the HOA doesn’t allow large dogs, etc.
- Inspection – Boiler plate timeframe is 10 days. Day 1 starts the day following the receipt of an accepted offer. This is when the seller must allow for reasonable inspections of the home to help the buyer perform their due diligence. This includes a general home inspection, as well as additional inspections, but does NOT include the buyer allowing their contractor access for bids. If that’s important, please do that during your inspection.
- Lending – If you’re getting a loan, you have 10 days from acceptance to lock in your lender, rate and sign your disclosures with the lender. The buyer is required to submit a Loan Status Update (LSU) by day 10, showing that lines 1-40 of the LSU has been completed. This is typically done by the lender, on the buyers behalf. However, if the lender is unable or unwilling to accommodate, the buyer can complete this form themselves… while they question their decision to hire that lender. 😉
- Signing and Loan Docs – According to the contract, the buyer must obtain their final approval from the lender, no later than 3 days prior to close. This is where it gets sticky. That 3 days means 3 full days, not including the close date or the date you get the approval. Meaning, if you close on Friday, you must have that final approval by Monday.
This timeframe can be VERY sticky… All parties are ready to have it all done and get this thing wrapped up, and sometimes the seller has another transaction on the line as well, so this is the most important time to get right AND if possible, get done early.
- Finance Contingency- The buyer has until 3 days prior to close, in order to secure the loan. If denied, they are entitled to their earnest money back.
- Close of escrow – The date you select as the close of escrow is the day that the home records in your name and you get the keys. The close of escrow should NOT be the day you sign documents for the loan.
- The seller will be able to sign their docs with escrow at any time, as they are only required to ‘wet sign’ the title over to the buyer, just like a car sale, this has to be notarized and will be on file with the county.
- The buyer will sign their documents and title after the lender has finalized the loan and sent docs over to Escrow. In most cases, we don’t know what day this will be, as the escrow agent won’t usually schedule this signing until docs are received.
- Possession is defined in Arizona as “at close of escrow”, meaning, after the county records the property in the name of the new buyer.
Please keep in mind that all of these time frames are negotiable IF the buyer and seller agree, in writing, and should be done at the time of offer. Also, a crucial thing to keep in mind is that there are NO breaches without a cure.