- a future event or circumstance that is possible but cannot be predicted with certainty.
The contingency period allows a buyer a way out of the contact, if anything major is discovered that isn’t readily known. This phase begins once you have accepted a buyer’s contract to purchase. Issues with a property need to be investigated by a purchaser. Physical inspections allow a buyer to thoroughly go over a property with a fine toothed comb. If anything is found, there is ample time to hire various contractors or engineers to further investigate to your desire. In our area this time frame is typically ten days, but is always negotiable.
Termite work, also known as Section 1 now falls under request for repair as of 11-2014. Section 1 is an active infestation, and no lender will close a loan without these repairs being completed. Most often this happens before the close of escrow, and sometimes can happen shortly after.
HOA docs, or homeowner’s association documents are ordered and furnished to a buyer. It is important for them to understand the rules that govern their chosen home, and can be a deal breaker in rare cases.
Loan and appraisal contingencies allow a finance purchaser time to satisfy a lender for the funding they are seeking. An appraisal is ordered quickly after contract acceptance, so the lender can determine if their loan is a good investment. Loan contingencies give time for the lending firm to pass the file through their underwriting system, to dot the i’s and cross the t’s. This time frame is typically seventeen days, but is also flexible.
The time frames mentioned are spelled out in stone once they are agreed to in a Residential Purchase Agreement. A buyer has up until midnight of the agreed timeline to perform. A seller can cut off a non-performing buyer if they can’t do their due diligence in the time frames mutually agreed to.
We at 1850 Realty are happy to share information about the home selling process. Transactions can vary individually, and we are here to help you with your real estate needs. To discuss in more detail, don’t hesitate to contact us:
Next article in this series: Contingencies Removed.