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Deadlines in Purchase & Sale Agreements

Generally, "time is of the essence" in meeting deadlines in an earnest money agreement. This means that both parties can insist upon strict compliance with deadlines set forth in the agreement, and neither party is obligated to give the other party a grace period within which to perform. Exceptions to this general rule arise when the party asserting the deadline is guilty of bad faith, lack of diligence, estoppel, or waiver.

A party is guilty of bad faith when the party interferes with the performance of the other party or refuses to cooperate with the other party in fulfilling a requirement of the contract. For example, a seller who refuses to allow an appraiser or inspector access to the property is quily of bad faith.

A party is guilty of lack of diligence if the party fails to take reasonable steps necessary to fulfill a term or condition of the agreement. For example, a purchaser who fails to timely submit information reasonable requested by the lender as a condition of loan approval is quilt of lack of diligence.

Estoppel occurs when a party makes a representation of existing fact upon which the other party relies to their detriment, which representation the first party later denies. For example, a seller who represents that work orders required by the lender have not yet been completed cannot later get out of the transaction on the basis that the work orders in fact where completed. Of course, a lender would not order a re-inspection of the repairs until the seller indicates the repairs have been completed. It would be unfair to allow the seller to get out of the transaction on the basis that the sale failed to close by the agreed date, when the reason for the delay was the seller's own representation that the work orders had not yet been completed.

A waiver of a deadline occurs when the party now asserting the deadline has engaged in conduct inconsistent with the termination of the agreement. For example, if the purchaser continues to pursue financing after the closing date has passed, then the purchaser has waived the closing date. Likewise, if the seller continues to treat the agreement as still in effect, then the seller may not take the position that the agreement has expired when a better offer is presented. Any conduct which treat the agreement as still in effect, and which is inconsistent with termination of the agreement can constitute a waiver of a deadline. Of course, neither party may unilaterally waive a deadline, the waiver is only binding on the party who has engaged in the inconsistent conduct.

Extensions to deadlines in earnest money agreement are common. However, as with any other modification of an existing contract, an extension must be supported by new and independent consideration to be enforceable. The party who requests the extension or for whose benefit the extensions operates must give up something of value or incur a legal detriment, or the other party must receive some additional benefit in order for the extension to be binding. If the party requesting the extension has the legal right to terminate the transaction, but foregoes that right in exchange for the extension, then the extension is binding and enforceable without any additional consideration. However, if the extension benefits only one of the parties, then the extension is not binding on the other party, even if the extension is in writing and signed. For example, a purchaser who requests an extension of the deadline for waiving a financing contingency must give some consideration to the seller in exchange for a binding extension. A seller who grants such an extension without any consideration is not bound by the extension. On the other hand, an extension of a closing date necessitated by lender delay, where the financing contingency has not been waived by the purchaser, is enforceable, because the agreement would have been legally defunct without the extension and the purchaser would not have been in default.

The implied duty of good faith and cooperation does not go so far as to require a party to grant an extension of an express deadline to accommodate the other party. Therefore, the party requesting the extension should be prepared to make some concession in order to obtain the extension.

Deadlines in earnest money agreements are a frequent source of disputes between purchasers and sellers. Such disputes can be avoided by allowing sufficient time periods in the first place, by recognizing as early as possible when extensions might be needed, and by securing written extensions, when needed, supported by sufficient considerations.

Courtesy of:

Doug Tingvall
Attorney at Law

What to expect an Agent to do for You!!!

What an Agent does for the Commission.

Pre-listing Activities

  1. Make appointment with seller for listing presentation. 
  2. Send a written or e-mail confirmation of appointment and call to confirm. 
  3. Review appointment questions. 
  4. Research all comparable currently listed properties. 
  5. Research sales activity for past 18 months from MLS and public database. 
  6. Research “average days on market” for properties similar in type, price and location. 
  7. Download and review property tax roll information. 
  8. Prepare “comparable market analysis (CMA) to establish market value. 
  9. Obtain copy of subdivision plat/complex layout. 
  10. Research property’s ownership and deed type. 
  11. Research property’s public record information for lot size and dimensions. 
  12. Verify legal description. 
  13. Research property’s land use coding and deed restrictions. 
  14. Research property’s current use and zoning. 
  15. Verify legal names of owner(s) in county’s public property records. 
  16. Prepare listing presentation package with above materials. 
  17. Perform exterior “curb appeal assessment” of subject property. 
  18. Compile and assemble formal file on property. 
  19. Confirm current public schools and explain their impact on market value. 
  20. Review listing appointment checklist to ensure completion of all steps. Listing appointment presentation: 
  21. Give seller an overview of current market conditions and projections. 
  22. Review agent and company credentials and accomplishments. 
  23. Present company’s profile and position or “niche” in the marketplace. 
  24. Present CMA results, including comparables, solds, current listings and expireds. 
  25. Offer pricing strategy based on professional judgment and interpretation of current market conditions. 
  26. Discuss goals to market effectively. 
  27. Explain market power and benefits of multiple listing services. 
  28. Explain market power oh Web marketing, IDX and REALTOR.com. 
  29. Explain the work the brokerage and agent do “behind the scenes” and agent’s availability on weekends. 
  30. Explain agent’s role in screening qualified buyers to protect against curiosity seekers. 
  31. Present and discuss strategic master marketing plan. 
  32. Explain different agency relationships and determine seller’s preference. 
  33. Review all clauses in listing contract and obtain seller’s signature. After listing agreement is signed. 
  34. Review current title information. 
  35. Measure overall and heated square footage. 
  36. Measure interior room sizes. 
  37. Confirm lot size via owner’s copy of certified survey, if available. 
  38. Note any and all unrecorded property lines, agreements, easements. 
  39. Obtain house plans, if applicable and available. 
  40. Review house plans, make copy. 
  41. Order plat map for retention in property’s listing file. 
  42. Prepare showing instructions for buyer’s agents and agree on showing time window with sellers. 
  43. Obtain current mortgage loan(s) information: companies and account numbers. 
  44. Verify current loan information with lender(s) 
  45. Check assumability of loan(s) and any special requirements. 
  46. Discuss possible buyer financing alternatives and options with seller. 
  47. Review current appraisal if available. 
  48. Identify Home Owner Association manager if applicable. 
  49. Verify Home Owner Association fees with manager – mandatory or optional and current annual fee. 
  50. Order copy of Homeowner Association bylaws, if applicable. 
  51. Research electricity availability and supplier’s name and phone number. 
  52. Calculate average utility usage from last 12 months of bills. 
  53. Research and verify city sewer/septic tank system. 
  54. Calculate average water system fees or rates from last 12 months of bills. 
  55. Or confirm well status, depth and output from Well Report. 
  56. Research/verify natural gas availability, supplier’s name and phone number. 
  57. Verify security system, term of service and whether owned or leased. 
  58. Verify if seller has transferable Termite Bond. 
  59. Ascertain need for lead-based paint disclosure. 
  60. Prepare detailed list of property amenities and assess market impact. 
  61. Prepare detailed list of property’s “Inclusions & Conveyances with Sale.” 
  62. Compile list of completed repairs and maintenance items. 
  63. Send “Vacancy Checklist” to seller if property is vacant. 
  64. Explain benefits of Home Owner Warranty to seller. 
  65. Assist sellers with completion and submission of Home Owner Warranty application. 
  66. When received, place Home Owner Warranty in property file for conveyance at time of sale. 
  67. Have extra key made for lockbox. 
  68. Verify if property has rental units involved. And if so, 
  69. Make copies of all leases for retention in listing file. 
  70. Verify all rents and deposits. 
  71. Inform tenants of listing and discuss how showings will be handled. 
  72. Arrange for yard sign installation. 
  73. Assist seller with completion of Seller’s Disclosure form. 
  74. Complete “new listing checklist”. 
  75. Review results of Curb Appeal Assessment with seller and provide suggestions to improve salability. 
  76. Review results if Interior Décor Assessment and suggest changes to shorten time on market. 
  77. Load listing into transaction management software program.

    Entering property into MLS database. 

  78. Prepare MLS Profile Sheet – agent is responsible for “quality control” and accuracy of listing data. 
  79. Enter property data from Profile Sheet into MLS listing database. 
  80. Proofread MLS database listing for accuracy, including proper placement in mapping function. 
  81. Add property to company’s Active Listings list. 
  82. Provide seller with signed copies of Listing Agreement and MLS Profile Sheet Data Form within 48 hours. 
  83. Take additional photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography. Marketing the listing 
  84. Create print and Internet ads with seller’s input. 
  85. Coordinate showings with owners, tenants, and other Realtors®. Return all calls – weekends included. 
  86. Install electronic lock box if authorized by owner. Program with agreed-upon showing time windows. 
  87. Prepare mailing and contact list. 
  88. Generate mail-merge letters to contact list. 
  89. Order “Just Listed” labels and reports. 
  90. Prepare flyers and feedback faxes. 
  91. Review Comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability. 
  92. Prepare property marketing brochure for seller’s preview. 
  93. Arrange for printing or copying of supply of marketing brochures or flyers. 
  94. Place marketing brochures in all company agent mailboxes. 
  95. Upload listing to company and agent Internet sites, if applicable. 
  96. Mail “Just Listed” notice to all neighborhood residents. 
  97. Advise network referral programs of listing. 
  98. Provide marketing data to buyers from international relocation networks. 
  99. Provide marketing data to buyers coming from referral network. 
  100. Provide “special Feature” cards for marketing, if applicable. 
  101. Submit ads to company’s participating Internet real estate sites. 
  102. Convey price changes promptly to all Internet groups. 
  103. Reprint/supply brochures promptly as needed. 
  104. Review and update loan information in MLS as required. 
  105. Send feedback e-mails/faxes to buyer’s agents after showings. 
  106. Review weekly Market Study. 
  107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale. 
  108. Place regular weekly update calls to seller to discuss marketing & pricing. 
  109. Promptly enter price changes in MLS listings database.

    The offer and contract 
  110. Receive and review all Offer to Purchase contracts submitted by buyers or buyers agents. 
  111. Evaluate offer(s) and prepare “net sheet” on each for owner to compare. 
  112. Counsel seller on offers. Explain merits and weakness of each component of each other. 
  113. Contact buyers’ agent to review buyer’s qualifications and discuss offer. 
  114. Fax/deliver Seller’s Disclosure to buyer’s agent or buyer upon request and prior to offer if possible. 
  115. Confirm buyer is pre-qualified by calling loan officer. 
  116. Obtain pre-qualification letter on buyer from loan officer. 
  117. Negotiate all offers on seller’s behalf, setting time limit for loan approval and closing date. 
  118. Prepare and convey any counteroffers, acceptance or amendments to buyer’s agent. 
  119. Fax copies of contract and all addendums to closing attorney or title company. 
  120. When Offer-to-Purchase contract is accepted and signed by seller, deliver to buyer’s agent. 
  121. Record and promptly deposit buyer’s earnest money into escrow account. 
  122. Disseminate “Under-Contract Showing Restrictions” as seller requests. 
  123. Deliver copies of fully signed Offer to Purchase contract to seller. 
  124. Fax/deliver copies of Offer to Purchase contract to selling agent. 
  125. Fax copies of Offer to Purchase contract to lender. 
  126. Provide copies of signed Offer to Purchase contract for office file. 
  127. Advise seller in handling additional offers to purchase submitted between contract and closing. 
  128. Change MLS status to “Sale Pending”. 
  129. Update transaction management program to show “Sale Pending”. 
  130. Review buyer’s credit report results – Advise seller of worst and best case scenarios. 
  131. Provide credit report information to seller of property to be seller-financed. 
  132. Assist buyer with obtaining financing and follow up as necessary. 
  133. Coordinate with lender on discount points being locked in with dates. 
  134. Deliver unrecorded property information to buyer. 
  135. Order septic system inspection, if applicable. 
  136. Receive and review septic system report and assess any impact on sale. 
  137. Deliver copy of septic system inspection report to lender and buyer. 
  138. Deliver well flow test report to lender, buyer and listing file. 
  139. Verify termite inspection ordered. 
  140. Verify mold inspection ordered, if required.

    Tracking the loan processed 
  141. Confirm return of verifications of deposit and buyer’s employment. 
  142. Follow loan processing through to the underwriter. 
  143. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale. 
  144. Contract lender weekly to ensure processing is on track. 
  145. Relay final approval of buyer’s loan application to seller. Home Inspection 
  146. Coordinate buyer’s professional home inspections with seller. 
  147. Review home inspector’s report. 
  148. Enter completion into transaction management tracking software program. 
  149. Explain seller’s responsibilities with respect to loan limits and interpret any clauses in the contract. 
  150. Ensure seller’s compliance with home inspection clause requirements. 
  151. Recommend/assist seller with identifying and negotiating with trustworthy contractors for required repairs.
  152. Negotiate payment and oversee completion of all required repairs on seller’s behalf, if needed.

    The appraisal 
  153. Schedule appraisal 
  154. Provide comparable sales used in market pricing to appraiser. 
  155. Follow up on appraisal. 
  156. Enter completion into transaction management program. 
  157. Assist seller in questioning appraisal report if it seems too low.

    Closing preparations and duties 
  158. Make sure contract is signed by all parties. 
  159. Coordinate closing process with buyer’s agent and lender. 
  160. Update closing forms and files. 
  161. Ensure all parties have all forms and information needed to close the sale. 
  162. Select location for closing. 
  163. Confirm closing date and time and notify all parties. 
  164. Assist in solving any title problems (boundary disputes, easements, etc.) or in obtaining death certificates. 
  165. Work with buyer’s agent in scheduling and conducting buyer’s final walk-through prior to closing. 
  166. Research all tax, HOA, utility and other applicable prorations. 
  167. Request final closing figures from closing agents (attorney or title company). 
  168. Receive and carefully review closing figures to ensure accuracy. 
  169. Forward verified closing figures to buyer’s agent. 
  170. Request copy of closing documents from closing agent. 
  171. Confirm buyer and buyer’s agent received title insurance commitment. 
  172. Provide “Home Owners Warranty” for availability at closing. 
  173. Review all closing documents carefully for errors. 
  174. Forward closing documents to absentee seller as requested. 
  175. Review documents with closing agent (attorney). 
  176. Provide earnest money deposit from escrow account to closing agent. 
  177. Coordinate closing with seller’s next purchase, resolving timing issues. 
  178. Have a ”no surprise” closing so that seller receives a net proceeds check at closing. 
  179. Refer sellers to one of the best agents at their destination, if applicable. 
  180. Change MLS status to Sold. Enter sale date, price, selling broker and agent’s ID numbers, etc. 
  181. Close out listing in transaction management program. Follow up after closing 
  182. Answer questions about filing claims with Home Owner Warranty company. if requested. 
  183. Attempt to clarify and resolve any repair conflicts if buyer is dissatisfied. 
  184. Respond to any follow-up calls and provide any additional information 

NAR's view of what Real Estate Agents do for a living... as testified before the House Financial Services Committee on Housing.

How Judgment Liens Affect Title

A judgment lien attaches automatically to non-exempt real property.

A judgment lien attaches automatically to non-exempt (i.e., non-homestead) real property owned or 
acquired by the judgment debtor and located in the county in which the judgment is entered, or in which 
an abstract of judgment is filed, to secure satisfaction of the judgment. RCW 4.56.190-200. The judgment 
lien is effective for ten years after the date of entry of the judgment. The lien is extinguished upon full 
satisfaction of the judgment or upon release of specific property encumbered by the lien. 

Prior to 1984, a judgment lien did not attach to homestead property. Mahalko v. Arctic Trading Co., 99 
Wn.2d 30 (1983). However, a judgment lien now does attach to the value of the property in excess of the 
homestead exemption (presently $40,000 in "net value"). RCW 6.13.090. In other words, a judgment lien 
does not attach to the debtor's principal residence, unless the debtor's equity exceeds $40,000. 

With respect to real estate contracts, judgment liens do attach to the purchaser's interest in non-exempt 
real property being purchased under a real estate contract, Cascade Security Bank v. Butler, 88 Wn.2d 
777 (1977), but no longer attach to the seller's interest under the contract. RCW 4.56.190 (effective 
August 23, 1983). 

Generally, the priority of a judgment lien is determined by when the judgment is entered or the abstract of 
judgment is filed. However, a judgment creditor is not a bona fide purchaser or encumbrancer within the 
meaning of the recording act. Therefore, a judgment lien is junior to a prior unrecorded mortgage or 
deed. Aberdeen Fed. Sav. & Loan Ass'n v. Empire Mfd. Homes, 36 Wn. App. 81 (1983), cert. denied, 
100 Wn.2d 1041 (1984). 

With respect to judgments against a purchaser, a purchase money security interest has priority over a 
prior judgment against the purchaser, Bisbee v. Carey, 17 Wash. 224 (1897), although some title 
insurance companies are reluctant to insure the priority of a purchase money security interest over a prior 
judgment lien against the purchaser. 

Appealing an adverse judgment does not in itself stay enforcement of the judgment or preclude the 
judgment lien from attaching; the judgment creditor must post a supersedeas bond in order to stay the 
judgment lien pending appeal. 

Of course, as with most liens, the foreclosure of an underlying encumbrance eliminates a junior judgment 

Judgment liens cause serious title problems in a pending transaction. However, frequently such 
problems can be solved. If a judgment lien appears on a title report for a pending sale, and if the property 
is homestead property in which the seller's equity is $40,000 or less, then the judgment does not 
constitute a lien against the property and the title insurance company should remove the judgment lien 
from the exceptions to the title report. Otherwise, the seller must pay the judgment or obtain from the 
judgment creditor a release of the property. Generally, if the amount of the judgment exceeds the seller's 
net proceeds from the sale, the judgment creditor is willing to release the judgment lien in exchange for 
payment of all or most of the seller's net proceeds. 

This article contains general information only, and should not be used or relied upon as a substitute for competent 
legal advice in specific situations. 

RE LAW Bulletin No. 006 Page 1 of 1 Revised 7/28/93 

Courtesy of:

Doug Tingvall
Attorney at Law
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