How and When Do I Remove My Offer to Purchase Contingencies?
Jeff does a great job explaining the contingency period and how they are removed. It's important to note that in California, all contingencies are removed in writing by buyer signature, so nothing just "happens." Hopefully that gives buyers some peace of mind.
How and When to Remove Contingencies
in an Offer on a House
When buyers make an offer there are a number of contingencies that are part of the offer.
The RPA, or Residential Purchase Agreement, here in California spells out the various contingencies and the typical time frames (while there are defaults on these, dates are negotiable) for making an offer on a house.
Note: an Offer to Purchase document may be different in other states and the discussion here may not apply to your situation – discuss this with your Realtor!
Typically your purchase will be contingent on a thorough investigation of the property (including a home inspection, and perhaps other desired inspections), a review of HOA documents (if property is a condominium, is in a planned unit development or other common interest development ), insurability of the property, a review of all seller disclosures and Natural and Environmental Disclosures, a satisfactory appraisal and loan approval, among others.
If you have to sell a home and cannot purchase a new one without doing so, your offer will be subject to the sale (i.e., closing) of your current home (read “How to Buy a House – Contingent Offers?”). Here in California there is a specific form for that, the Contingency for Sale of Buyer’s Property (form COP). You may find that a seller is not willing to accept an offer with this contingency, given the market conditions, at least in our area where there are often multiple offers.
A common question buyers ask, and one that refers to specific deadlines in the contract, is “how and when do I remove my offer contingencies?”
Contingencies, and their removal dates, are critical to pay attention to. Obviously you do not want to remove a particular contingency until you are satisfied it’s been met, but deadlines are important, and you do not want to jeopardize your purchase and/or your deposit (we are speaking from a California contract perspective here) by not adhering to the contract and removing relevant contingencies in a timely manner. You should speak with your agent about questions you might have about these issues and contingency due dates.
There is a specific form, Form CR or Contingency Removal, that is used to remove specific contingencies. Buyers can remove selected contingencies (e.g., the property investigation), remove "all but the following...", or remove all the contingencies. The form is then sent to the seller for acknowledgement. Buyers will submit as many forms as needed until all contingencies are removed.
If I can help you think through your home buying requirements, and your wish list, in light of your budget and other factors, and answer any questions about contract contingencies, please give me a call or text me at (760) 840-1360. Then we’ll get started on finding you the right home and get you into escrow!
Visit Home Buying Tips and Advice to view my YouTube Channel playlist of short videos on how to buy a home, then give me a call (760-840-1360) to discuss your home buying needs and questions.
If you are relocating, check out my video series at Relocation Tips and Advice and my Relocation blog for helpful information.
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