Selling Soulfully with Jennifer Allan


Do You Remind the Other Side of Contingency Deadlines?


During a recent SWS Teleseminar show (Negotiate with Soul) a discussion arose as to whether or not a listing agent should "remind" the buyer agent of the buyer's contingency deadlines. We didn't exactly call it "reminding," but rather "checking in" or "following up," but to my ear, it's the same thing as "reminding."

For example, in Colorado, there is a loan approval deadline which somewhat functions as the Drop Dead date in a transaction. If the buyer does not have loan approval by that deadline (typically a few days to a week prior to closing), he can do one of three things. He can:

1. Terminate the contract and receive a refund of his earnest money, no questions asked, or

2. Ask for an extension of the loan approval deadline (which the seller has the option to grant or not), or

3. Do nothing.

Please note - the onus is on the BUYER to notify the other party if there is a problem with the loan. If the buyer does nothing, it is assumed that the loan is fine, and the earnest money goes "hard" - that is - if the transaction does not close on time, the seller has the option to keep the buyer's earnest money. But NOT HAVING LOAN APPROVAL DOES NOT TERMINATE THE CONTRACT and if it still somehow can close on time, great!

So, back to the question, (assuming an agency relationship exists) should a listing agent remind the buyer agent about the loan approval deadline?

You can probably tell by my tone what my opinion is... but first, what's yours?



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Comment balloon 19 commentsJennifer Allan-Hagedorn • August 24 2011 08:01AM


I do.  Simply put, I am working for the seller and if there is an issue, I want to know about asap so I can assist my seller make decisions that are right for them.



Posted by Linda Edelwich, Glastonbury Office's #1 Top Producing Agent-not on (William Raveis Real Estate) over 8 years ago

I actually struggle with this and was faced this week with a situation where I wondered whether or not it was in my seller's best interest to "remind" the buyer's agent.  I look forward to hearing the opinions.  Thanks for the post.

Posted by Melissa Stahl, Realtor, Exit 1st Class Realty over 8 years ago

I personally don't, but our administration staff keeps on top of deadlines and communicates them to any other brokers involved.

Posted by Chris Smith, South Simcoe, Caledon, King, Orangeville Real Esta (Re/Max Chay Realty Inc., Brokerage) over 8 years ago

Good morning, team members are listing agents....that's our niche....and it's not our job to make sure the buyers agent is paying attention.....we do make that phone call after the date for written notice has passed.....there will be no extensions given after the date of notice has passed.

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) over 8 years ago

Barbara - I'm with you 100%. Will comment more later when more opinions are posted!

Chris - So, you DO remind the other side of their contingency deadlines, correct?

Melissa - stay tuned.

Linda - True... more to follow.

Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 8 years ago

Jennifer, in NC we use a Due Diligence contract which requires non-refundable Due Diligence money up front from the buyer. Once a Due Diligence period has passed Earnest Money is in play and the onus is transferred to the buyer to perform or lose their Earnest Money. In your post you refer to loan, it is not my job to pursue the buyers loan once EM is in play. As far as a Due Diligence date, you bet I will pursue via "reminder" the clearing of that date, early if possible, once the buyer has indicated satisfaction with repair responses, so that my seller client can rest assured that the EM is now on the table and the buyer isn't just getting a few extra days or weeks to "rethink" their commitment. I would not say I have a hard and fast rule regarding contingencies in general, rather which contingencies most affect my client.

Posted by SarahGray Lamm, Realtor - 100K Hours of NC Real Estate Experience (Allen Tate Realtors Chapel Hill, NC 919-819-8199 ) over 8 years ago

Yes, I try and talk with the other side about approaching deadlines.  I don't believe that what I do for a living is a blood sport.  Instead, I try to work in a collegial environment where everyone is completely aware of the due dates.  My job is to close deals.

Posted by Judith Abbott (Coldwell Banker Residential) over 8 years ago

Of course I'll send out a reminder when I see it coming up on the timeline.  I look at is as a courtesy that takes only seconds to employ. 

Posted by Kevin J. May, Serving the Treasure & Paradise Coasts of Florida (Florida Supreme Realty) over 8 years ago

No, I would not remind the other agent, I think we should each do our jobs well, and I'm going to assume I am working with a competent agent.

I completely agree with Sarah #6.  

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) over 8 years ago

Intersting post as I just got a remioner today. I have the buyer. So I would say no. Does the other person think I do not know what I am doing. Or are they just trying to be nice? So from the non listing side I do not need the reminder. From the listing side if I KNOW the buyer intends to do something then I do remind them. But only if I know

Posted by Charlie Ragonesi, Homes - Big Canoe, Jasper, North Georgia Pros ( over 8 years ago

In Virginia, it's slightly different when it comes to a financing contingency - if a buyer has a financing contingency, then the onus is on the Listing Agent/Seller to ask the Buyer to lift that contingency when the deadline passes.  So, if the Buyer's Agent does not send over the paperwork once the contingency expires, the Listing Agent has to request it in writing.  Now, unfortunately - and I have a MAJOR PROBLEM with this - the only recourse the Seller has at that point is to void the contract if the Buyer refuses to lift the contingency.  I think it should expire automatically, period, and the onus should be on the Buyer to ask for any necessary extension.

Considering the circumstances, as a listing agent, I HAVE to ask the Buyer to lift the contingency as most certainly are not going to do so without prompting.  Most comply, even there is nothing to force them to do so.

As far as other contingencies go, I simply inform my seller of the pros and cons of reminding the other side and ask what their preference is;  if we are under contract after a long time on market, usually the seller does not want to rock the boat - and wants to play nice with the other side to insure we get to the closing table.  If, however, there have been other difficulties and the seller is out of patience, then we may go another route. 

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 8 years ago

Susan and I are in the same market and I think she has definitely covered all of the bases here.  One of the other responders said that "we are all professionals" and I've definitely worked with non-professionals.  Sometimes we even have to do their jobs for them.  If I'm trying to make sure that a contract goes to closing, I'll go the extra mile to make sure that happens even if it means doing the other agent's job for them.  I might not do it happily but I'll do it.

Posted by Nancy Pav, Nancy Pav, Your "GottaHave" Realtor (Century 21 Redwood Realty) over 8 years ago

Our biggest time frame contingency is the inspection one - often sellers ask how the home inspection went so sometimes we do contact the buyers agent to ask, but really, no I don't think it is my job as the listing agent to remind them.  If they miss the deadline it's not our fault.  It's in the contract and in fact THEY pick how many days they want that contingency to be.  As a buyer agent I don't expect to be reminded.  It is clear in our contract that Time Is Of The Essense.  It's the individual agent's jobs to protect their clients. -Kasey

Posted by Kasey & John Boles, Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties (Jon Gosche Real Estate, LLC - over 8 years ago

Thanks for all the comments - here's my take...

As it may be obvious, I don't believe in reminding the other side of their contingencies. NOT because I want to kill the deal (of course I don't!), but because as my seller's representative, I don't believe it's appropriate for me to remind the buyer of their "outs" especially when it comes to inspections and loan approvals. In my market, if the inspection objection deadline passes in silence, the buyer has agreed to accept the home "as-is," which is what my seller would prefer in most cases, so why would I want to nudge the buyer or his agent to get us a list of repairs, and imply that we're expecting one?

Regarding the loan approval deadline - here's how I handle it. In the weeks leading up to the closing (and loan approval), I'll check in (usually with the lender) to make sure the loan is progressing, and if there are any issues, I'll definitely make contact with the buyer agent. But in the day or two before the deadline, I back off. If I hear nothing from the lender or the buyer agent, I'll call first thing the next day to see if we're good to go - AFTER the contingency has expired. At this point, the buyer's earnest money is "hard" and non-refundable ONLY IF THEY DON'T CLOSE on time. If everything is good and we close - great! But if the loan fails at the last minute, I have retained my seller's right to keep the earnest money if he chooses to do so.

It's mostly theoretical, of course, but I think it's important to realize that if an agency relationship exists (and in the absence of that absurd provision in VA - sorry Susan), your duty is to your client, NOT the transaction, and it's not appropriate to try to be the "nice guy" (or gal) if it potentially harms your client.

That said, Susan's final comment about asking your client which approach they prefer you take is dead-on, although your beliefs and philosophies on the matter will influence their response.

But, to confirm, my approach to this subject is not to kill a deal, be the bad guy or otherwise create dissension, but rather to best serve my client and protect him or her in the event things go sour. And think about it - YOU'RE not following-up on the other guy's dates and deadlines doesn't make you a bad guy or gal at all - it's not as the other side is depending on you to do it for them... at least we hope not!!!


Posted by Jennifer Allan-Hagedorn, Author of Sell with Soul (Sell with Soul) over 8 years ago

Jennifer, I must admit that I don't do it enough.  I know that it is important, and I think I should tie a string around my finger in order to remember.  :-)

Posted by Randy Elliott, REALTOR : Lodi / Stockton, CA (RE/MAX Gold) over 8 years ago

I'm with you Jennifer. In TN if the buyer does not notify the seller in writing that they have applied for financing they are technically in default and the seller has an "out." 

Last year I had a contract where that deadline was about to pass when we got a new, higher offer. The buyer's agent didn't provide the notification and we withdrew from the contract.

The buyer's agent made all sorts of threats to sue for commission etc saying that the seller was acting in bad faith but the truth was just that she didn't realize that provision was in the contract since no one in my local market pays any attention to it. If I'd reminded her of the requirement it would have been to my client's detriment.

<Sidebar> READ your contracts and make sure that you know what all the deadlines are, even if "in practice" you know how things work.</sidebar>

Posted by Julia Odom, Chattanooga Homes for Sale (Select Realty Professionals) over 8 years ago

I work with a Transaction Coordinator whose job it is to make sure deadlines are met and not a single initial is missing on our paprework. So, far, I've had deals with good communication. I know that a contingency that isn't removed can become an "as is" agreement, but ultimately, I prefer to have signed paperwork where all parties are clear that contingencies have been removed without further conditions.

Posted by Denise Montalvo, Realtor on the Move – Keeping Pace with the Market (Bradley Real Estate ) over 8 years ago

Jennifer, we definitely remind the buyer's agent of the contract deadlines several times during the escrow period. I prefer to overdo it than to leave my seller in a difficult position.

Posted by Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR, Top Listing Broker (BROKER of Green Realty Properties® - 954-667-7253) about 8 years ago
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