Home Buying in Seattle>Question Details

pmarquart60, Both Buyer and Seller in Stanwood, WA

Washington State. There is a clause in Purchace and sales agreement. " Sellers Right to Terminate"

Asked by pmarquart60, Stanwood, WA Mon Jan 28, 2013

This clause says that the seller has the right to terminate up to 30 days after mutual acceptance. So, the seller can decide that for what ever reason they can termintate the contract as long as it is within the 30 days?

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Jennifer Nilssen’s answer
You should ask your agent or attorney but typically the NWMLS contracts don't allow the seller to exit the contract at all, only the buyer. Generally you are able to give your buyers notice after 30 days that you will terminate IF they don't waive the financing contingency. If they waive the financing contingecy, generally you are still bound to the contract. If they don't, you might be able to back out but most sellers don't want to do that.
0 votes Thank Flag Link Mon Jan 28, 2013
I am a little querulous as to your answer. I am looking at a NWMLS contract right now and it specifically says under section 2 of the financing addendum in section "a" : Right to Terminate Notice. Any any time _____ days (30 days if not filled in) after mutual acceptance, seller may give notice to Buyer that Sller may terminate the agreement at any time 3 days after delivery of that notice (the "Right to Terminate Notice")".
Flag Wed Apr 22, 2015
The NWMLS forms manual reads . . . you know, at the very least, pmarquart, you should ask your agent what they think.
0 votes Thank Flag Link Mon Jan 28, 2013
There is a lot of advice and insight here, some good, some not so good, but practically everyone has noted that you need to consult an attorney. And that is rock solid advice.
0 votes Thank Flag Link Mon Jan 28, 2013
I have had a situation where a seller, who happened to be an attorney, was choosing to read it in the broad form you are noting for her own reasons. My clients were the buyers, and I was able to keep everything in play and my clients did buy the home. But it was a difficult situation and I feel it is very poorly worded. As agents, we tie it to the 22A, But when a seller wanted to cancel for no reason at all, she felt it gave her the right to do so, and it really was not 100% clear that she couldn't.

An attorney would clearly need to be called for anyone to try to invoke that right, whether it be about financing or something else. That attorney NOT being the actual buyer or seller, as it was in my case, would be best. :)
0 votes Thank Flag Link Mon Jan 28, 2013
Hello pmarquart60,

Form 22A (Financing Addendum to purchase and sale agreement) has a "Seller's Right to Terminate" paragraph. This addendum is primarily a protection for the buyer so that if the buyer is unable to obtain financing the contract to purchase the property can be terminated and the buyer will be entitled to get back his/her earnest money.

If no time frame is filled in in the Seller's Right to Terminate paragraph then it defaults to 30 days. This doesn't mean that that seller can decide to terminate the contract for any reason as long as it is within the 30 days. It means that the seller is willing to give buyer 30 days to find financing before moving on. After 30 days (or whatever the number filled in is) the seller has the right to terminate the contract. So a smaller number in this spot is better for the seller and a larger number is better for the buyer.

A seller might receive another offer after entering mutual acceptance with a buyer, and it could be a more appealing offer so the seller may decide to terminate an existing contract with with a buyer if he/she has yet to obtain financing and the time period set forth in form 22A, paragraph 2 has passed.
0 votes Thank Flag Link Mon Jan 28, 2013
Financing: 22A 2.a Sellers right to terminate
Sellers can give notice, after a set time, to Buyer to remove the financing condition or the offer is terminated.
This is in place to force the buyer to get his/her/their loan complete.
If a seller feels the buyer is not going to be able to close, this clause gets the buyer out of first position so seller may sell the property to a buyer who is able to close.
If the buyer waives the financing condition then the buyer risks buyer's EM or other such remedy as stated in the contract.
In my 30 years of RE I have only advised the Seller to use this a couple of times.
0 votes Thank Flag Link Mon Jan 28, 2013
Whoa, not so fast. No agent should be commenting on your question without knowing more information. Have you negotiated a contract in which you are the seller (or buyer)? Are there addenda to the agreement with terms and conditions which alter the seller's or buyer's rights? Without reviewing all documents, no agent can answer this question. In addition, yours is really a legal question and agents are not able to offer you legal advice. You need a real estate attorney. Do yourself a favor and consult with an attorney that specializes in real estate law before you take any action. You'll be glad you did. Good luck.
0 votes Thank Flag Link Mon Jan 28, 2013
Pmarquart,
I believe you are referring to a paragraph on 22A, the financing contingency. If this is the case, the seller can give written notice to the buyer to waive the financing contingency, which puts your earnest money at risk if the loan is not approved, or the seller could terminate the deal.
Without written notice, this contingency is not automatically waived and it's rarely in the seller's interest to start over if you are close to finalizing the deal.
Since I'm guessing here, I want you to take your contract to your agent for a better explanation or to an attorney.
0 votes Thank Flag Link Mon Jan 28, 2013
Hmmm, I am not familiar with that clause and I am pretty sure it does not appear in the standard NWMLS form documents. So I question whether you understand this contractual term correctly. Moreover, I am hesitant to draw any conclusions based on your restatement of the contractual term. To draw a meaningful conclusion, I would want to read the contract myself so I could start by knowing exactly what it says.

If this is a serious issue you need to hire an attorney to understand and explain this contractual term. You should not rely on a blog frequented by agents.
0 votes Thank Flag Link Mon Jan 28, 2013
No! They do not have that right for any reason. The agent below is not from WA and not familiar with our forms. The seller has the right to ask to the buyer to remove their financing contingency. That is all. If the buyer agrees to remove the contingency then both parties are bound to the contract. If the Buyer refuses to remove their financing contingency then the seller can unilaterally kill the deal. Make sense?

Chris
0 votes Thank Flag Link Mon Jan 28, 2013
Sure, just like the buyer can choose to terminate the contract as well.
0 votes Thank Flag Link Mon Jan 28, 2013
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