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What is a Notice to Perform & When Should You Use It?

By HomeBay

A California residential purchase agreement and real estate purchase agreements in all states include several strict deadlines that dictate when buyers must take certain actions. In California, when a buyer fails to comply with these time frames, the seller can prompt the buyer to complete the needed action by delivering a Notice to Perform. This post will explain what that is, when to use it and how it works.chula-vista-front.jpgA Notice to Perform is a real estate tool designed to make buyers stick to agreed upon deadlines that are defined in the real estate purchase agreement. Sellers can issue a notice if a deadline passes and buyers haven't taken the agreed upon actions. In the California residential purchase agreement, issuing a notice typically gives the buyer 48 hours to remedy the situation at hand. Timeframes in other states vary.

If a buyer fails to comply after the defined timeline, the seller may deliver Escrow Cancellation Instructions to the buyer. Under some circumstances, the seller may be able to keep the buyer’s
earnest money deposit.

Common Breaches:

Sellers typically consider having their transaction coordinator deliver a Notice to Perform when:

  • The buyer fails to submit their Contingency Removal Form by the Contingency Removal Date
  • The buyer fails to provide proof of funds to close escrow
  • The buyer fails to deliver their earnest money deposit to escrow


Note of Caution to Sellers:

Buying a house is a stressful process with many steps for the buyer to perform. A buyer may unintentionally make mistakes or forget deadlines. In some circumstances, lenders get delayed on appraisals and loan approval, which is beyond the buyer's control. To avoid souring an otherwise good deal, try approaching your buyer’s failure to perform with empathy and issue a Notice to Perform as a last resort. 


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