The Home Buying Process: Contingencies

What is a contingency anyway? And how does it protect both the buyer and the seller during escrow?

If you’ve never purchased a home before, you might want to prepare yourself just a little, as there’s a little bit of paperwork involved. Actually, that’s an understatement.Cheryl Lichen -ooper There’s a decent amount of paperwork involved. If you’re in the “looking” process, then you probably already encountered at least some paperwork while getting yourself pre-approved for your home loan.

When you finally do decide on the home of your dreams, we’ll sit down together and write up your offer. Unlike personal property, real estate comes with a lot of legalities that insures both the buyer AND the seller are qualified to perform the transaction. For the most part, a buyer’s qualifications mostly revolve around their ability to pay for the home, either as an all cash sale, or by obtaining a home mortgage loan. For the seller, we have to make sure that they are the actual owner of the property and that they are legally entitled to authorize the sale of the home.

This is why one of the most important sections of the Real Estate Purchase Agreement (Known in California as the RPA-CA) has to do with contingencies. 

What is a contingency as it pertains to buying a home in California?

A contingency is basically a time frame where the buyer and/or seller agree to accomplish a set of tasks in order to complete the sale of the property. These contingencies are clearly spelled out in the RPA-CA, with default dates written into the contract. These default dates may be changed with written consent from both parties.

What do contingencies cover?

Contingencies in the real estate transaction process cover several items that are required to be completed prior to closing escrow. They include:

  • Final loan approval (Buyer)
  • Acknowledgement of receipt of all disclosures necessary to complete the transaction (Buyer and Seller)
  • Home Inspection and Request for Repairs (Buyer)
  • Property Appraisal (Buyer/Lender)
  • Pest inspection (Seller)
  • Any other arrangements and agreements pertaining to the real property transaction as written and agreed upon by both parties

What happens if the buyer or seller do not complete the necessary tasks by the end of the contingency period?

In most cases, either party may submit a written request to continue the contingency period. If the buyer has not completed all of their contingency obligations, the seller may submit a “Notice Of Buyer To Perform,” which would compel the buyer to show proof that the contingencies were completed, or risk the transaction being cancelled by the seller. The buyer may also risk losing his/her deposit  as well.

How can I get all of these things done within the contingency period?

As a real estate professional, I have many years experience in helping buyers achieve their real estate goals. I work with escrow teams that insure you have all of the tools and notifications you’ll need to help guide you through these processes with as little stress as possible. If you have questions about contingencies or the buying process in general, feel free to contact me by calling the phone number at the top of this page, or by using the QuickResponse form below.

Cheryl Lichen-Hooper
Keller Williams VIP Properties
25124 Springfield Court, Suite 100
Valencia CA 91355
Office: 661-505-8102
Fax: 661-251-2648



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