Hey there, I’m bringing you the answers to a couple of questions about contracts that came into my Podcast Hotline—I actually get questions about contracts pretty regularly…
So, this investor wanted to know 2 things:
- How long should the inspection period be in the contract?
- When you send a contract to make an offer, do you sign the contract before sending it?
Okay, answer to #1: at least 14 days.
I’ve seen some investors go with just 7 days—but that is risky and simply not enough time.
Keep reading and you’ll see why…
Answer to #2: NO! I do NOT sign the contract before sending it.
Here’s why—and this has actually happened to me before, so I’m speaking from experience…
I want time on my side.
What does that mean?
Well, when I send a contract, sometimes it can take a week+ for the seller to get it, review it, sign it and then send it back… and at that point, my 14-day window for the inspection contingency could be about to close.
That’s bad, folks!
See, when both the seller and buyer (a.k.a. you the investor) sign the contract, it becomes a valid agreement.
If I were to sign the contract and send it to the seller who then signs it, it becomes a real legal enforceable document—and because of the timing, you may lose the opportunity for the inspection.
And you never, EVER(!) want to do a deal without having an inspection.
Another reason NOT to sign the contract before you send it?
The answer is time yet again…
When it’s not yet signed by both parties, the clock on your inspection period doesn’t start yet… giving you more time to analyze the deal and make sure it’s good to move forward on.
And since we’re talking about contracts, I have to add 2 super-important reminders… the advice I never stop telling my students:
- Send offers to everyone you talk to! Always be making offers.
- Always follow up! Half of your deals will come from your follow-up.
Bottom line… do NOT sign the contract before sending it—and be sure to include at least a 14-day inspection period.
You want time on your side, and this way, it is.