March 7th, 2012 at 6:52 pm
First, paragraph 6A(1) of the Purchase Agreement provides that the Seller “shall” deliver the TDS to the Buyer within 7 days. As a result, the failure to do so puts your Seller in breach of contract. Obviously that means you need to get the Seller’s portion of the TDS filled out quickly, and have yours done in the same time frame. We cannot have our failure to complete the TDS or AVID be the cause of our Seller’s breach.
Next, Civil Code section 1102.3 provides the buyer with a 3 day right to rescind the transaction within 3 days after the TDS is delivered in person or within 5 days after it is delivered by mail. Of course, as the listing agent, it is our duty to do everything possible to have that cancellation right eliminated as early in the deal as is possible. By delivering the TDS early, we eliminate that right early. Further, if the TDS is delivered after contingencies are removed, the buyer still has her 3 day right. Obviously, we never want to be the reason the buyer has another way to cancel the deal.
Next, in our experience, buyer’s accept negative disclosures about a property better early in the deal. Most buyer’s have a “honeymoon” period regarding the house immediately after their offer is accepted. I know that when I bought my house, there would have been very few disclosures that would have made my wife want to cancel. Rather, she loved the house and we would have figured out a way to accept any problem. I think the same is true for many buyers, so it is worth getting negative information to them early. Of course, later in the deal, when the glow has worn off and there have been other unpleasant issues between the parties, the buyer’s reaction to the TDS is much harder to predict.
Finally, your time is much too valuable to waste on someone who is going to cancel the deal upon receipt of the TDS. As a result, deliver it early and determine whether the disclosures are going to be a problem. If they are, you can move on to a real buyer. If they are not, you have just eliminated one hurdle to closing your deal. There really is no downside to delivering the disclosures as early as possible.
In short, don’t wait to get the TDS and AVID to the Buyer. There are legal, contractual and practical reasons to deliver these documents early. It will both make your deal more solid and prevent you from wasting more time than is necessary.
As always, please feel free to contact us with any questions you may have
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