Most home sales and purchases have at least a few standard conditions (financing approval, satisfactory home inspection report, etc.) that form part of the formal Agreement of Purchase and Sale. These conditions must at some point be “fulfilled / satisfied” or “waived / removed” for the Agreement to be binding upon the parties and the transaction to proceed to closing.
Note:
Contingencies are conditions included in the contract to buy and sell real estate (contractual clauses) that offer an extra layer of protection for the buyer.
Both buyer and seller must agree to the conditions. If the condition is not satisfied within a specific time frame, the contract is considered void.
If you receive the inspection report and are either happy with what it showed or have successfully negotiated over repairs with the seller, it’s time (assuming the deadline hasn’t passed) to remove the contingency. The procedure for doing that depends on state law or custom.
* Sale of your existing home
* Satisfactory home inspection
* Completed repairs as agreed on
* Completed financing
* Appraisal contingency
California law requires what’s often referred to as “active removal” of a contingency or contingencies. The buyer must make a formal request in writing by signing and submitting a Contingency Removal form. Without this form, any contingencies included in the purchase agreement remain in effect, even if the standard 17-day contingency period (or date listed in the contract) has passed.
Yes and no. The contingencies are not waived automatically after 17 days. However, elapse of the 17-day period allows the seller to deliver a Notice to Buyer to Perform (NBP) giving the buyer two days to remove contingencies. If the buyer doesn’t, the seller may cancel.
No. The buyer would be entitled to retain their deposit. Since the buyer has the right to cancel, it is not a breach of the contract. And since it is not a breach, the seller cannot claim damages. However, an agent should never provide assurances that the buyer will get their deposit back. Ultimately, if a seller is refusing to release the deposit from escrow, the dispute may go to court or arbitration.