One thing that justifiably concerns both home buyers and sellers are contingencies. Contingencies are basically just conditions that have to be met in order for the purchase of the home to be finalized. The most prominent contingencies are inspection, appraisal and loan. The
boilerplate timeframes on the CAR (California Association of Realtors) purchase agreement, or the standard offer, are 17 day contingencies for inspections/investigations, 17 day for appraisal and 21 days for loan. These are negotiable during the offer and counter but those are the standard timeframes.
So what do they mean?
Every situation may be different so we’ll stick with a normal situation. What it means is that you have that amount of time to get those tasks accomplished. For instance you have 17 days (again if that’s the timeframe negotiated) to have any an all investigations, inspections, etc. to completely satisfy your concerns. On day 17 the sellers would expect you to remove, in writing, that contingency. California is an active contingency state so contingencies don’t automatically expire on a certain day….they must be removed in writing. Once contingencies are removed it becomes more difficult to get your initial deposit back (usually 3% of purchase price in our area) unless there is some type of breach of contract by the other party or unless the other party agrees.
Worried about meeting your transaction contingencies in order to have a smooth home sale? I’m here to help! Send me a message with your questions.