This form is one that you hope a real estate agent never has to use. In most instances, it’s a sign communications are getting strained between the buyer and seller (or between their respective agents).  A contractual action that is not met by the buyer calls for a careful scrutiny of the situation.

When a buyer fails to lift contingencies within the prescribed period per contract, the listing agent is expected to demand compliance from the buyer through his agent. Initially, this will be a verbal exchange between agents, after which the buyer will either:

- Comply and remove all contingencies

OR

- Cancel the contract because of failure to get a loan approval

OR

- Request for (one week) extension

When the buyer requests an extension, the seller will have to weigh his options – does it look like the buyer is going to get his loan approved, or is it better to put the property back on the market. Oftentimes the seller will grant an extension.

But if you get an extension request the second time, or even a third time, how many more times before you say enough? And by this time, you hardly hear much from the buyer’s agent anymore. This leads you to believe the buyer is having problems with finding a lender. And yet, they’re not letting up.

Meanwhile, you are losing the opportunity to put the property back on the market and find a more qualified buyer. It hurts the seller’s chances of optimizing the purchase potential of his home, especially so if it is in a declining market.

Before frustration sets in, and when it appears that buyer will end up with no loan, it seems a fair move for the buyer and his agent to initiate to cancel the contract. Otherwise, the seller’s ultimate move would be to send a Notice to Buyer to Perform, giving the buyer (typically) 24 hours to remove contingencies, or face the consequence of cancellation.