Calendar days vs business days in real estate contracts

Ask three people when a "10-day" inspection period ends and you can get three answers. The difference is almost always how they counted: calendar or business days, whether the day of acceptance counts, and what happens when the last day lands on a Sunday.

None of these questions has a single right answer across the country. The answer is in your contract. Here's what to look for, and how to count once you've found it.

Find the definitions first

Before counting anything, read the definitions or "time" section of the purchase agreement. It usually settles four questions:

1. Calendar days or business days? Many forms use calendar days for most periods and business days for a few, such as the earnest money deposit.
2. Does day one start the day of acceptance or the day after? Most forms don't count the day of the triggering event, so day one is the next day. Some say otherwise.
3. What if the last day is a weekend or holiday? Many forms roll the deadline to the next business day. Others don't, and the deadline stays on the Saturday.
4. What time does the day end? "By 11:59pm", "by 5pm", or simply "on" the date, often in the property's local time zone.

If the contract doesn't answer one of these, state law or local practice might, and that's a question for the agents or an attorney, not a guess.

Counting calendar days

Calendar days count every day, weekends and holidays included. With a Tuesday, September 22 acceptance and a form that starts counting the next day:

That second row is where files go wrong. If the form rolls weekend deadlines to the next business day, the buyer has until Monday. If it doesn't, the period ended on Sunday, and a Monday objection is late.

Counting business days

Business days usually skip Saturdays, Sundays and legal holidays, but the contract's definition wins. With the same Tuesday, September 22 acceptance, a 3-business-day earnest money deadline lands on Friday, September 25: Wednesday, Thursday and Friday.

Watch the holiday calendar. A deadline that crosses Thanksgiving, Christmas or a federal Monday holiday can slide by a day or more, and the contract may say which holidays count.

The Closing Disclosure uses its own definition

One deadline doesn't come from the purchase contract at all. For most mortgage loans, federal rules require the buyer to receive the lender's Closing Disclosure at least three business days before closing. For this rule, a business day is every day except Sundays and federal public holidays, so Saturdays count.

Working back from a Friday, November 6 closing, the buyer needs the Closing Disclosure by Tuesday, November 3. If certain terms change after that, such as the loan product or a significant APR change, a new disclosure and a new three-day wait can push the closing. That's why a late Closing Disclosure is one of the most common reasons a closing slips.

Write the rule down with the date

The fix for counting mistakes isn't doing the maths more carefully. It's recording how you counted, next to the date:

Inspection ends Friday, Oct 2. 10 calendar days from acceptance (Sept 22); day 1 is the day after; weekends roll forward (paragraph 22).

When an addendum changes the period or the acceptance date turns out to be a day later, anyone on the file can recalculate in seconds, and anyone who questions the date can see exactly where it came from.

Quick reference

• Read the definitions before you count: kind of day, day one, weekends and holidays, cut-off time.
• Calendar days include weekends. Check whether a weekend deadline rolls forward.
• Business days usually skip weekends and holidays. Check which holidays.
• For the Closing Disclosure, Saturdays count and Sundays don't.
• Record the counting rule next to every date.

Closingbird counts deadlines with the rule written into each one, whether calendar or business days, and shows where every date came from, so the next person on the file doesn't have to redo the maths. Always check the result against your contract.