American baseball legend Yogi Berra first uttered the phrase about baseball’s 1973 National League pennant race. The team he was coaching was was way behind in the standings but would eventually rally to win the division title. It’s not the only head-scratching quote attributable to this former catcher. He is also responsible for “It’s like deja-vu all over again” and the thought provoking “Always go to other people’s funerals, otherwise they won’t go to yours.”
But there is something about the “It ain’t over…” quote that applies to all kinds of situations in life other than baseball that continues to intrigue us. It tells people to wait and don’t jump to conclusions because the struggle may just be starting.
When it comes to agreements of sale for real estate, this quote should be required reading for both buyers and sellers. There are at least fourteen instances in the Pennsylvania Association of REALTORS® standard agreement of sale that could cause the transaction to become unglued. If you get caught looking ahead to the settlement table, any one of these fourteen could jump up and bite you.
- Earnest Deposit Money – Initial deposit must be in Broker’spossession within five days of agreement’s execution date, provided an alternate date is not agreed upon. The seller may terminate the agreement under if buyer does not meet this critical date.
- Settlement Date – The date for settlement may only be extended by mutual written agreement between the buyer and seller. If one party can’t meet the settlement date because something unforeseen crops up, the other party may have the right to terminate the agreement and retain the earnest money deposit.
- Written Acceptance – Buyers and sellers are only bound by real estate agreements that are in writing and agreed upon by the parties to the contract. Terms that are verbally agreed to between parties are not enforceable.
- Mortgage Commitment – Buyer is obligated to deliver a copy of their mortgage commitment to the Seller upon receipt by a certain date agreed upon in the contract. If the mortgage is not committed by the lender prior to this date, the seller may terminate the agreement.
- Interest Rate Lock – Buyer is bound by the agreement of sale if they were given the opportunity to lock in their interest rate during the course of the contract but chose to float their rate and the rate is now higher than the terms stated in the mortgage contingency.
- Mortgage Application – Buyer is responsible to make a mortgage application and pay for it within seven days of the fully executed contract unless another time frame is agreed upon. If the buyer fails to apply for a mortgage, they could be in default.
- Lender Required Repairs – Buyer must immediately notify seller in writing if their lender requires repairs on property. The seller has five days to respond to buyer’s request in writing. If seller does not respond or refuses to make repairs, buyer has five days to accept or reject seller’s decision in writing. If buyer fails to respond, they must proceed with sale.
- Inspection Contingency – Buyer must have property inspections completed within ten days of execution date of agreement unless another time frame is agreed upon. Buyer must respond to seller in writing during contingency period whether they will accept, reject, or request corrective action. If corrective action is requested, seller has five days to respond in writing if they will accept, reject, or negotiate corrective action(s). If no acceptable resolution is arrived at, buyer must respond in writing how they will proceed within two days. If no written response from buyer following the negotiation period, buyer is deemed to have accepted property.
- Public/Private Assessments – If seller receives an assessment after agreement has been signed, they must notify the buyer in writing within five days as to whether the seller will comply with the assessment. If seller chooses not to comply, buyer must respond in writing within two days of intent to proceed or not.
- Municipal Requirements – If the seller receives notification from a municipality that there are uncorrected defects in/on property, they must notify buyer in writing within five days of their intent to correct. If seller chooses not to correct, buyer must respond in writing with five days of their intent to proceed.
- Resale Certificate – If the property is associated with a homeowners’ association, the seller must request a resale certificate from the association within fifteen days of execution of agreement showing that they are up-to-date with their dues. The association has ten days to fulfill the request or they are in violation of the Uniform Planned Community Act. Once the certificate is generated, the buyer has five days to examine the certificate and proceed or terminate in writing.
- Title Insurance – Seller must be able to convey good and marketable title to buyer. If seller cannot convey good and marketable title, buyer may terminate contract anytime prior to settlement and receive earnest money deposit back and any costs for inspections and certifications.
- Property Damage – If any part of the property is damaged prior to settlement, seller needs to notify buyer in writing of their intent to repair item. If seller chooses not to repair, buyer has five days from notice to respond in writing of their intent to proceed with sale. Buyer accepts property if no notification is produced.
- Communications – Buyer must promptly deliver the Loan Estimate and Closing Disclosure to agent for the buyer when received. This will ensure that closings go off without a hitch.
As you can see, when an agreement of sale for real estate is signed between a buyer and seller, the work is just beginning. Don’t get caught peeking ahead. Take care of all the tasks at hand, because “it ain’t over till it’s over.”
All the best!