- Sarah Vance - REeBroker Group
Contingency Removals
Updated: May 2, 2022
What to Know About Contingency Removal by: Sarah Vance
Need to know what a contingency is – check out our previous post here.

All Parties Should Fully Read and Understand the Purchase Contract They Are Signing
It is important to know what your contract says. Some purchase agreements (such as the C.A.R Residential Purchase Agreement) requires an active removal of contingencies for a real estate contract versus a passive removal. Therefore, an active removal requires an action like all contingencies must be removed in writing and are not automatically removed with the passage of time.
Each contingency has its own default time period/removal date based upon the terms and Acceptance date of the purchase contract. This date is defined in the offer as when the buyer will remove the contingencies and commit to a firm intent to close escrow. The appraisal, physical inspection, and buyer’s investigation contingencies have a defaulted removal date of 17 days after acceptance and the loan contingency has a default removal date of 21 days after acceptance.
What happens if the contingencies are not removed?
If the contingency period (date) has passed for a contingency to be removed, then the seller (or buyer) may issue a Notice to Perform. This is a tool designed to ensure all parties are sticking to their contractual duties defined in the purchase agreement. The Notice typically allows 48 hours for the other party to remedy the situation otherwise the transaction may be cancelled by the issuing party. Even though the Notice to Perform is in every real estate agent’s arsenal, it is highly recommended to not use it at the first sign of a passing removal date. As an initial step, as a real estate professional you should maintain open communication with the buyer or seller to discover the reason for the delay and work towards solving the problem.
As a seller, it is important to remember that purchasing a property can be stressful and with a lot of moving parts making mistakes and missing deadlines may be unintentional. In some instances, it may even be out of their hands especially if it involves a lender or an appraiser.
Therefore, if a contingency date has come and gone choose empathy first towards the buyer or seller situation and the Notice to Perform as a last resort. This will help to ensure that the transaction continues to move forward in an amicable way without stirring up unnecessary strife.
When contingencies are removed, what does that mean for the buyer and seller?
It means that if the buyer does not close escrow, whether due to lender or unsatisfaction with the property, then the buyer may not be entitled to a return of buyer’s deposit.
Read more: https://www.info.reebroker.com/blog
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