K. Timeline Contingencies_These contingencies are the ones that keep a transaction moving forward at a timely pace. While nearly every transaction will have its challenges, it is important to closely watch the amount of time used for the various sub_processes like finishing the purchase sale agreement, securing financing, getting licensing approval, completing Phase One inspections, getting a real estate appraisal, having staff fingerprinted (in some states)... etc. A delay in one process can cause delays in other processes until a transaction stretches to nine months instead of the more normal 90 days. Some examples of timeline contingencies are as follows: i. This LOI becomes invalid if it is not fully executed on or before X date. ii. Buyer agrees to provide first draft of purchase sale agreement on or before X date. iii. Buyer agrees to submit completed financing application to chosen lender on or before X date. iv. Buyer's lending institution will inform XYZ Brokerage, Inc. of preliminary approval of buyer's financing on or before X date. v. Buyer's lending institution will inform XYZ Brokerage, Inc. of final approval of buyer's financing two weeks before Closing Date. vi. Seller agrees to notify state licensing of pending transaction within three days of receiving fully executed purchase sale agreement and notification of buyer's receipt of Commitment Letter from buyer's lender.
4. On Offer acceptance there is either a contract generated or a pro forma invoice generated. Since the offer is binding once accepted, the offer if well enough detailed and advised can and often does take the place of the contract.* Customarily in Real Estate transactions the purchase offer itself is generally also the contract for purchase as well. The offer becomes a binding contract once accepted.The Letter of Intent is not binding, and rather silly at the worst of times. An LOI by definition only registers intent to purchase, and it specifies this intent weakly, and due to its ambiguity should be avoided.