Friday, August 23, 2019 / by Barry Owen
The Repair Resolution Period begins on the day following the Buyer's submission and Seller's receipt of the Repair/Replace Proposal.
We recommend this period not be fewer than 5 days because some repairs may require additional diligence to be done.
The Seller may need to obtain an opinion or quote for work to be done before responding.
Urgency is high because this "performance deadline" is an absolute.
"In the event Seller and Buyer do not reach mutual written resolution during the resolution period or a mutually agreeable written
extension thereof as evidenced in an amendment to this agreement signed by both parties within said period of time, this agreement
is hereby terminated. If terminated, Buyer is entitled to a refund of the earnest money."
The Purchase and Sale Agreement speaks loud and clear as to the importance of "time is of the essence".
The reason for this is that, prior to this language in the agreement, Buyers and Sellers could drag this inspection resolution out for many days thereby obstructing forward motion of the entire process.
Both Buyer and Seller have the same "rights" during this period of negotiation - Accept - Counter offer - Reject, and consists of however many "Repair/Replace Proposals" required. It is crucial for all parties to "watch the clock" so as not to either reach resolution or extend the resolution period . . . We do not want to "accidentally" terminate the contract by missing this performance deadline.
The final resolution to be signed by all parties is RF 655 Repair/Replace Amendment.
It is not uncommon for the Seller to offer a cash concession in lieu of making repairs. This can be a great solution because it takes away the potential complications of hiring contractors, coordinating the repairs, and then the possibility that repairs are not completed to the satisfaction of the Buyer. A caveat for this way of resolution is that some types of loans will not allow a "cash Settlement" from Seller to Buyer and all financial dealings must, by law, be disclosed on the final ALTA Settlement statement. Often the remedy is for a contractor to be identified with a firm bid for the work. Seller pays that contractor at closing and the work can be done after closing and supervised by the Buyer.
The good news is that, once resolution is reached, most transactions proceed smoothly because all of the possible "negotiation scenarios" between Buyer and Seller will have been satisfied.
Of course, Your Vital Few REALTOR of Pareto Realty will advise and coach you through this potentially stressful and complex phase of the process.