Cornelius, Home Buyer in Los Angeles County, CA

Should I sign the contingency removal form at the beginning of a new contract?

Asked by Cornelius, Los Angeles County, CA Tue Feb 9, 2010

I opened escrow to purchase a brand new $550000 condo about 4 months ago. It dragged on and on because the in-house lender kept on telling us to wait. Finally, we changed the lender and got approved. My financial situation has changed since then, and me and the seller agreed to change to a smaller unit which is $450,000. The seller sent us a contingency removal form right away, not giving us any time for anything. Should I go ahead and sign?

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9
I would never sign anything until the action has taken place. You would sign away your loan contingency without a loan commitment would you?
0 votes Thank Flag Link Mon Apr 12, 2010
Hi Cornelius, just based on the slim amount of details presented below I personally would not sign the "CR" and immediately seek a legal opinion. After all, your question is really about contract law and all the details of the contract you signed have not been shared.

If you do "make it out alive" with your deposit funds you might consider reviewing the following document I wrote about buying from a Builder: http://docs.Steven-Anthony.com/BuilderRealtorAgent.pdf

Your situation, and others that have come up concerning builder purchases, is the reason I wrote the paper, which touches on a number of key issues you, and other potential buyers, may not have even considered:

Information Access
Purchase Price vs. Market Value - Financing
Financing Scrutiny
Contract Review
Negotiation
The Phase-out of the “10 Year Builder Warranty”
Inspections
Builder Upgrades
Realtor®, Schmeal-tor. Who Needs’em?
Finding your Realtor®

(Be sure to review the section on Dual-Agency on page 4)

Best, Steve
0 votes Thank Flag Link Tue Feb 9, 2010
Do you have representation, an agent of your own? If not you should seek the advice of an attorney. We really can't advise you what to do with out taking liability for the advice if you follow it.

Good Luck.
0 votes Thank Flag Link Tue Feb 9, 2010
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
Your call. I wouldn't do it.
0 votes Thank Flag Link Tue Feb 9, 2010
Here's what I need to sign or else the seller will cancel the contract without returning the deposit.
"Buyer hereby removes all contingencies. (once all contingencies are removed, whether or not buyer has satisfied himself regarding all contingencies or received any information relating to those contingencies, buyers deposit may not be returned if buyer does not close escrow. this could happen even if, for example, buyer does not approve of some aspect of the property or lender does not approve buyer's loan"
0 votes Thank Flag Link Tue Feb 9, 2010
Cornelius
If you are already in escrow, I would not remove contingency until it was time to remove per your contract. Once you do, you will have little outs without the seller keeping your deposit. That is just my personal opinion.

I would highly suggest next time having a Realtor on your side of the transaction to help you out. Realtors can sell new homes and you always want someone representing your interest!!

Good Luck!!
0 votes Thank Flag Link Tue Feb 9, 2010
No... They need to give time to do inspections and to make sure you still qualify for a loan. My guess is that you would not have asked this question unless you felt uncomfortable with the request. Listen to your "inter voice." Don't allow your self to be pushed around by a pushy agent. Do what you need to do to protect yourself. If they can't give you the time you need, then maybe it's time to walk.
0 votes Thank Flag Link Tue Feb 9, 2010
Removing what contingency? Personally in this market, moreso being a new build, I would not sign it. New builds are not moving that rapidly and they need you more than you need them. That is my personal opinion. In the end, it is whatever makes you feel good and confident.
0 votes Thank Flag Link Tue Feb 9, 2010
Cornelius: This is a very good example of why consumers should have a Real Estate Agent working on their behalf even when purchasing a new home. Of course it is too late now that you are already moving forward trying to negotiate for yourself in this New Home Development, due to the fact that New Home Developments will only allow you to have an agent assist you if you have the agent with you on your first visit.

So, without seeing the form, no one here will be able to tell you if you should sign it or not. You should have a Real Estate Attorney look at it at this point.

I have helped many of my buyers purchase New Homes and it I have run interference for them on many things, such as the interest rate that the "Builder's Lender", wants to charge, obtaining upgrades and more.

Hopefully, anyone reading this who is considering purchasing a new home will have a Real Estate Professional assist them from the very first time they go to the sales office to prevent the situation you are now in.

Good Luck to you and I really do hope it all works out.
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0 votes Thank Flag Link Tue Feb 9, 2010
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