Home Seller's Guide: When & How to Use a Notice to Perform

By Home Bay

Posted on October 21st, 2016

Inspections, appraisals, and escrow deposits all have deadlines. Perhaps the most important deadline in your real estate agreement is your closing date. But what happens if a deadline comes and goes and your buyer doesn’t keep up their end of the deal? There’s a tool you can use called a notice to perform. Let’s take a look at how it works.


What is a Notice to Perform?

A notice to perform is a tool home sellers can use if their buyer misses a deadline they agreed to in your real estate purchase contract. By issuing a notice to perform, you effectively give your buyer 48 hours to respond and meet their deadline.

Understanding How to Use a Notice to Perform

Before issuing a notice to perform it’s important to understand the various reasons one may be used. Here are some examples:

  • Paperwork submission delays:
    You can use a notice to perform if your buyers neglect to submit critical loan or other transaction paperwork in a timely fashion.
  • Inspection period delays:
    If the inspection period outlined in your real estate purchase contract ends and your buyer has not yet gotten an inspection done or submitted their request for repairs, then they likely also haven’t removed their inspection contingency. You can issue a notice to perform.
  • Contingency removal delays:
    If the contingency removal date outlined in your real estate contract comes and goes and a contingency removal form is not submitted by your buyers, you have the option to issue a notice to perform.Essentially anytime a deadline has passed and buyers haven’t done what they’re supposed to do, you can issue a notice to perform. But, this shouldn’t be something you jump to without some serious thought.

Start By Communicating With Your Buyer

As a first step, it’s always a good idea to reach out to the buyer and learn what’s causing the delay and what steps they’re taking to rectify the issue. In some cases, it may be in both of your best interests to agree to extend a deadline in order to keep the sale on track. Just make sure that if you make any changes to deadlines, you should get it in writing as an addendum to your original contract.

What Happens After a Notice to Perform is Issued

If communicating with the buyer doesn’t work, it’s time to take a more drastic step by issuing a notice to perform. Once this has been done, your buyer is required to take action to move the sale forward within 48 hours. Should the buyer fail to act, the deal can fall apart and you may have to start the selling process over from scratch.

Hopefully, this post helped you understand what a notice to perform is and when and how it can be used as a tool to keep your home sale on track.

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Posted in Escrow