Counting Days in Real Estate Contract Contingencies

How do we count the number of days for contingencies in home purchase & sale contracts? It's not too complicated to answer, but misunderstandings regarding the "Computation of Time" in real estate contracts are unfortunately very common. Below, you will find information for both Washington state and Texas real estate contracts.

While all contract contingencies are necessary, arguably, the most critical contingency in any real estate purchase and sale contract is the Financing Contingency, which is typically 20-30 days. All parties, especially the home buyer and their real estate agent, need to accurately count the number of days and adhere to any related contract terms. The inspection contingency is just as important. Wait too long after the inspection to negotiate any repairs, and you may have just accepted the home as-is.

Computation of Time - Seattle NWMLS Contracts

In the Seattle area, the Computation of Time is incorporated into the contract, which is clearly stated in the NWMLS Form 21, Residential Purchase & Sale Contract. Unless the parties agree to the contrary in writing, all real estate contracts using NWMLS forms will automatically count the number of days according to the following computation of time summary:

• Day commencing the period is Day 0
• 5 days or less - count Business Days ONLY
• Greater than 5 days - count ALL days
• All periods must end on a Business Day - except that "possession" can be on a weekend
• All periods end at 9pm local time

(Disclaimer: If you are a real estate agent, you must confirm the above with your Principal Managing Broker. In other words... don't take our word for it.)

Therefore, when negotiating the number of days for any contingency agreement or addendum in the contract, it is important to consider business days, weekends, and holidays. It is not uncommon for a contingency period to include all three.

In Washington - When is 5 Days Longer than 7 Days?

For example, in Washington, if your Inspection Contingency is 5 days, and the agreement was entered into on Wednesday (Day "zero"), but also includes the coming Memorial Day weekend, then your contingency period is actually 8 calendar days, ending on the following Thursday at 9pm. This is because Saturday, Sunday & Monday (Memorial Day) do not count.

Ironically, if the agreement called for a 7-day inspection period, the contingency would end a day EARLIER, on Wednesday. Why? Because according to the contract's computation of time, any period greater than 5 days includes all days (but must end on a business day). So in this example, a 7-day period is less than a 5-day. Confusing... isn't it?

Texas Contracts - Counting Days

In Texas, real estate contracts calculate deadlines using calendar days, not business days. This means every day, including weekends and holidays, is counted towards your deadline. Further, all deadlines end at 5 p.m. central time.

When a deadline in a Texas residential contract specifies "within ___ days after" the effective date, counting starts the day after this effective date. For example, if the effective date is on a Wednesday, then Thursday is considered Day 1, Friday Day 2, Saturday Day 3, and so on, regardless of weekends or holidays.

Do Weekends and Holidays Count as Days in Texas?

Although all calendar days are counted, Texas contracts have an exception for the delivery of earnest money and option fees. If these payments' deadlines fall on a weekend or holiday, it's extended to the next business day. However, this exception does not apply to other contract deadlines; those remain unchanged even if they end on a weekend or holiday. With this in mind, if, for example, you have a 10-day option period and it's close to Christmas, it's important to count the days and plan ahead, in case you need to negotiate for additional days for inspections and possible negotiations.

Delivering Notices and Documents in Texas

In Texas, for deadlines related to delivering notices or documents, holidays are treated as regular calendar days. This means if your deadline to deliver something falls on a holiday, like Christmas Day, you must still meet that deadline.

When entering into a home purchase and sale agreement, be sure to communicate with your real estate agent, and CONFIRM ALL time periods. "Time is of the essence" is all real estate contracts. Not knowing these dates, or just not paying attention can have dire consequences.