Contingency Removal box A2: "except:" Addendum...is this removal of contingencies or a delay?

Asked by seller, Sacramento, CA Sat Mar 16, 2013

If the buyer checks box A2 on the CAR CR form "All buyer contingencies are removed EXCEPT: addendum 1" (which list some repair items that were found on the inspection) is this full removal of his contingencies? Does this mean his deposit is now mine if he backs out? How does the addendum affect his deposit...not at all or only after all repairs are made and he approves? If checking A2 means his deposit is now mine, what is my motivation to get the repairs done if I know his deposit ($30K) is now mine? I'm just curious if this addendum is a delay to the removal of contingencies; what if I make all these repairs and he decides he "doesn't approve" and then backs out just before COE? Thanks for your help!

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seller’s answer
seller, Home Buyer, Sacramento, CA
Mon Mar 18, 2013
Thank you for all the helpful responses... I do not mistrust my agent btw. Releasing all buyers contingencies "except:"... created a "new" contingency in my opinion with the addendum. I wanted to get the opinion of other agents to see if it agreed with my agent's explanation.

Answers such as AGENT MACK MCCOY's FROM SEATTLE, WA below, is neither helpful or necessary.
At the very least Mr. McCoy--don't bother to post unless you have something worthy to say...how unprofessional of you.

Everyone else--thank you for your input, you have brought some good points for me to consider and ask. I understand this is just a forum, it is not likely to be used in a legal case; these posts are for education and clarification. Answers like 'read your contract' or 'ask your agent' seems silly, that's all...but I understand why many preface their answers with that comment. Thank you.
0 votes
Pacita Dimac…, Agent, Oakland, CA
Sat Mar 16, 2013
BEST ANSWER
"Except" means not all contingencies were removed. And if there were other conditions to remove, such as seller complying with the request for repairs, were not met, then the buyer may not be willing to remove all contingencies.

If there was a request for repairs/credits from the buyer, and if you as the seller, responded to the request for repairs itemizing what you are willing to do --- did the buyer consent and agree to your response?

if you do the repairs, you can provide proof that the conditions were met by qualified contractors.

If the buyer does not accept the repairs, then you may file your own Notice to buyer to perform. If the buyer fails to perform, then you can issue a cancellation of escrow.

But if the seller refuses to do the requested repairs, or there is no agreement between the parties as to the repairs (or credits), then both parties could cancel escrow.

The deposit would be yours is if the buyer removes ALL -- no exceptions -- conditions, then backs out of the agreement, or defaults through no fault of the seller.

Neither party gets the money without express and written approval of both parties regarding the disposition of the funds.
0 votes
Barbara Gran…, Agent, Anaheim, CA
Sun Mar 17, 2013
Hi Seller,

Since you alluded to the fact you don't have much of a relationship with your agent, please contact his or her broker to help guide you through this process. You have way too much going and are in need of a trained professional to sit down with you and address your specific concerns.

Good luck to you,

Barbara Grandolfo
0 votes
Mack McCoy, Agent, Seattle, WA
Sun Mar 17, 2013
Ask your agent.

C'mon, seller, what do you really expect? That we're going to tell you, "Yes, you can keep the deposit," and that's all there is to it?

If you don't like your agent, ask your attorney.
0 votes
Thank you for all the helpful responses... I do not mistrust my agent btw. Releasing all buyers contingencies "except:"... created a "new" contingency in my opinion with the addendum. I wanted to get the opinion of other agents to see if it agreed with my agent's explanation.

Answers such as AGENT MACK MCCOY's FROM SEATTLE, WA below, is neither helpful or necessary.
At the very least Mr. McCoy--don't bother to post unless you have something worthy to say...how unprofessional of you.

Everyone else--thank you for your input, you have brought some good points for me to consider and ask. I understand this is just a forum, it is not likely to be used in a legal case; these posts are for education and clarification. Answers like 'read your contract' or 'ask your agent' seems silly, that's all...but I understand why many preface their answers with that comment. Thank you.
Flag Mon Mar 18, 2013
Ute Ferdig, Agent, Newcastle, CA
Sat Mar 16, 2013
If you are not satisfied with your agent, you should consult with his/her broker who can help sort things out. That's one of the broker's responsibilities.
0 votes
Ute Ferdig, Agent, Newcastle, CA
Sat Mar 16, 2013
Based on what you describe, I don't see an unconditional removal of all contingencies. When somebody says "all, except..." it means not all in my humble opinion. I can't say that I have ever combined a contingency removal with a request for repairs, but I could imagine that perhaps the buyer's agent who prepared the limited contingency removal wanted to show that the buyer was still very interested and willing to close as long as long as you take care of the requested repairs. By removing all contingencies "EXCEPT" the buyer shows that he/she won't try to cancel the agreement for any other reasons. The liquidated damages clause only comes into play in the event of the buyer's unexcused default. A request for repairs alone does not constitute a buyer default, nor is it equivalent to a contract concellation. If you don't agree to the repairs, a cancellation may follow, but it would be a justified cancellation entitling the buyer to a refund of the earnest money deposit. A seller does not get to refuse the repairs and then keep the deposit money. That's really a no brainer and I think you recognized that it could not possibly work that way when you asked what your motivation would be to get the repairs done if the deposit were already yours.

Your concern about making the repairs without assurance of a closing is certainly valid and can and should be addressed. You should discuss this with your agent. Compensating you for repair expenses in the event of a cancellation by the buyer and keeping the deposit are 2 very different things. The first is related to actual damages and the latter is a result of triggering the liquidated damages clause as a result of a default by the buyer after having removed all contingencies. The whole purpose of the liquidated damages clause is to eliminate the need to proof actual damages. By the way, if the property that you are selling is a dwelling with no more than 4 units and the buyer intends to occupy the property, the amount of the liquidated damages in limited to a maximum of 3% of the purchase price.
0 votes
Patrick O'Ha…, Agent, Citrus Heights, CA
Sat Mar 16, 2013
The "Contingency Removal" is a removal of all of the contingencies it removes.
That means the contingencies it does not remove are still in effect. I fail to understand
the notion the the deposit would be yours. Even with the removal of all contingencies
the deposit isn't yours......it may become at risk, but it never is yours until Buyer and
Seller agree, or a higher power such as a court decides it.
You truly should be discussing all of this with your agent, including the requested
repairs.
0 votes
seller, Home Buyer, Sacramento, CA
Sat Mar 16, 2013
The sales contract is pretty standard, 17 day contingency removal of appraisal, loan, inspection. It's 17 days now and box A2 has been checked exactly as described above. If I was satisfied with my agent I wouldn't ask the question here...same goes for reading the contract. if that was clear, I wouldn't post the question. Please don't answer with "ask your agent", pretty obvious.
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Sat Mar 16, 2013
You can not hold up escrow or contingency removal based on a request for repairs.
It's hard to speculate not knowing the details but it sounds like no one really knows what their doing. As a seller you don't even have to respond to a request for repairs. If you agree to fix things then the buyer still has to remove all their contingencies within the time frame of the contract. They can not say they remove all but if you fix things or not. If that's what is going on here either agent understands contract guidelines.
The buyer has a right to a final walk through to see if the repairs have been made. Even if they have not been fixed they DO NOT have a right to hold up escrow and not close. They only right they have to sue you after for the agreed items not done.
You need to talk to your agent and get clarification on what is going on.
Good luck.
Web Reference:  http://www.LauraCoffey.com
0 votes
thanks!
Flag Sat Mar 16, 2013
Teri Andrews…, Agent, Auburn, CA
Sat Mar 16, 2013
These are questions you should be asking your agent who knows the unique details of your contract.
Reading the contract and contingency removal carefully will usually answer your questions including how deposit is handled.

Generally the Buyers deposit is held by the escrow holder until closing at which time it is distributed or cancellation of the escrow-where it's fate is decided by mutual agreement between the parties (sometimes requiring an attorney), usually it does not "become" the sellers automatically.
0 votes
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