Whether you’re new to real estate or a seasoned pro, I am sure you have run across a time or two when there was a question about when a contractual task was due within a transaction. In my 20+ years as a California real estate professional, I can tell you I have seen quite a few misdated tasks and incorrect timelines and as a real estate transaction coordinator (TC), having every date correct, every time is of high priority.
Let’s start with the definition of the two main components when it comes to preparing an accurate timeline;
What is considered a Day and what is considered Acceptance?
According to the definition in the California Association of Realtor’s Purchase Agreement, a day is simply defined as a calendar day. A day is from 12:00 AM through 11:59 PM. A business day is considered Monday through Friday, excluding legal holidays.
Now what is the definition of Acceptance? The C.A.R. Purchase Agreements defines it as the time the offer or final counter offer is fully executed, in writing, by the recipient Party and is Delivered to the offering Party or that Party’s Authorized Agent. In short, Acceptance is when the final fully executed document is delivered to the originating party.
When preparing a timeline to sync with everyone, the Acceptance date is considered day zero. Rather than it being counted, it is considered a starting point to begin counting so the following day would be day one. From day one, you will count every day, including weekends and holidays until you reach the agreement day.
For example, let’s say the Purchase Agreement has an Acceptance date of the 1st and the Seller disclosures are due on the 7th day after Acceptance. This would make the Seller disclosures due on the 8th.
So what do you do if the 8th happens to be a Saturday?
According to the definition, it would move forward to the next applicable business day. This would also apply if the 8th day was a Sunday or legal holiday. In this scenario, the Seller disclosures would then be due on the following Monday the 10th. Sometimes the following Monday could also be a legal holiday. In this case, the due date would move to Tuesday the 11th, and so on as needed.
You’ll also want to take into consideration the County Recorder’s Office when it comes to the Close of Escrow (COE) date. If the County Recorder’s Office is closed on the official due date, you would also move the COE date forward to the next applicable business day.
Be mindful, as I mentioned above, by definition Parties have until 11:59 PM on said due date to deliver whatever is due on that day. This could be Seller disclosures, a specific report or even a Buyer Contingency Removal. In California, real estate professionals typically work somewhere with the business hours of 8:00 AM and 6:00 PM. Most escrow offices close at 5:00 PM. So I’d recommend to be mindful of the timing when delivering documents, especially sensitive ones like an Accepted Purchase Agreement, because you’ll want to give the other Parties the opportunity to acknowledge receipt in a timely manner. If the deposit is due, chances of it being delivered and acknowledged after 5:00 PM are likely none.
I hope this was helpful information for the next time you’re prepare your contractual timeline. Below I’ve listed the current C.A.R. Residential Purchase Agreement paragraphs so you can reference of the definitions I mentioned verbatim.
Days: Paragraph 25.J
Acceptance: Paragraph 25.A
Close of Escrow (COE): Paragraph 25.G
Counting Days: Paragraph 25.I
