OFFER LETTER: PAYMENT TERMS

Today’s Topic: Terms of Payment. Right after the purchase price, this is the next big hurdle in closing a deal.

For all-cash purchases, the structure is usually straightforward: earnest money (EM) upon acceptance of the offer, and the balance paid after due diligence—typically 30 days from the earnest money payment. Better yet, use the phrase “on or before” to signal to the seller that you’re simply being conservative with the timeline.

Also, specify whether the number of days refers to “calendar” or “business” days. I prefer using “calendar” since it leaves less room for interpretation. For example, would you consider the typhoon week in July as “business” days? Government offices were closed, but most banks remained open.

Sellers often ask: “If it’s all cash, why wait?”

Fair question. Here’s the breakdown:

Document procurement – Even with a prompt SPA, it takes 3–5 days to get certified copies of the title, tax dec, tax clearance, and TIN verification. Some cities allow “expediting” to a day, but not all.

Document preparation and review – 1–2 weeks, depending on complexity and whether lawyers are involved (and if they are, expect it to take longer—I’ll discuss this another time).

Buyer’s fund preparation – They may need to pre-terminate time deposits and arrange Manager’s Checks.

The rest of that 30-day window? If any red flags do surface, the 30-day window gives both parties time to address and resolve them amicably.

Why Not Cut It Short?

Because shaving that timeline too thin risks surprises—and surprises can cost the buyer their earnest money.

On the flip side, when I’m representing sellers, I treat any buyer who claims they can close “in just a few days” after paying earnest money as a walking red flag.

Either they:

1.⁠ ⁠Don’t understand proper due diligence, or

2.⁠ ⁠Are just plain shady.

...unless they plan to pay in cash, which is not just unusual… it’s suspicious.

In short: the 30-day term isn’t a delay—it’s protection. Remember: under promise, over deliver.

As for transactions that require extra steps—like buying a mortgaged property or purchasing via bank loan—we’ll dive into those next week.