What happens if appraisal contingency date expires?

Asked by Arty, 91326 Mon Aug 23, 2010

I am in a contract with a 17-day appraisal contingency. It has been 15 days and the bank still has not delivered its appraisal report. What happens if I get the appraisal after the 17-day period? Does the contingency automatically get removed, or do I get to back out of the contract still?

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7
Steve Curtis, Agent, Walnut Creek, CA
Mon Aug 23, 2010
BEST ANSWER
Arty ... I assume that you are using a standard CAR Purchase Agreement. If so, the contract is specifically an "active removal" agreement ... your contingency remains in place until you remove it in writing. HOWEVER, as this deadline approaches the Seller will probably be advised by his agent to issue you a "24 hour Notice to Perform" ... after which if you still do not remove the contingency the Seller can unilaterally cancel the agreement (and that does indeed happen). Until you remove the contingency in writing in most circumstances you can cancel the agreement and get your deposit back. IF the Seller believes you are not acting in good faith to complete the contract and close the escrow, it could get nasty and the seller may refuse to release your deposit.

That's the long answer. The short answer is discuss all this with your agent. And if you are dealing with an REO or a new property where the builder has their own contract or lengthy addendum BEWARE. In the middle of all that is probably a clause that changes the agreement to a "passive removal of contingencies" which means after 17 days your contingency is automatically removed. Good luck

Steve Curtis
Broker / Owner
Windermere
925-408-0037
0 votes
Bob Georgiou, Agent, Danville, CA
Tue Aug 24, 2010
Arty (and even some agents here),

The problem with giving a quality repsonse is that the contract is a system. If A happens then B happens only if the Seller does C or D and the buyer does E and not F. Need more time, have your agent ask for more time and explain it to the sellers why, asap.
Web Reference:  http://bob2sell.com
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Tue Aug 24, 2010
Hello Arty,

In a standard real estate transaction, you are required to sign off on a separate sheet of paper to remove the contingency even if it's stated that you have 17 days. If you have not signed off on it, you may still have time. Go over the contract with your Realtor or if you like, I'd be happy to review your contract for you. Good luck :)

Kamal Randhawa
Broker
510-932-1066
0 votes
Arthur G. Wh…, Agent, Alameda, CA
Mon Aug 23, 2010
There is plenty of good obsevations in the other answers. However, I want to point out that the new version of the CAR contract went in to effect in April 2010. It provides for a default to a 48 hour notice to perform period. Also, when a contingency period ends on a holiday or weekend, the expiration date is extended until the end of the following business day. As always, consult your Realtor. He or she knows the situation best. Your circumstances could be different depending on the form of contract, or even the version of the contract that is being used. The first answer to any contractual question is this: what does the contract say? It seems simple, but it is often overlooked under pressure.

Arthur G. White
Cal DRE 01273793
Realtor, Broker-Associate, and Sales Manager
Red Oak Realty
art@redoakrealty.com
0 votes
Vickie Nagy, Agent, Palm Springs, CA
Mon Aug 23, 2010
Hello Arty,

Bernard is giving it to your straight. Your agent should confer with you and advise. However, since you asked, an extension request to keep it amicable and keep everyone on the same page is my first choice. Be sure to discuss other options, such as facing a 24-hour notice to perform.

Vickie Nagy, Keller Williams Realty, CA DRE#01363932
Phone (925) 407-7987
0 votes
CJ Brasiel, Agent, San Jose, CA
Mon Aug 23, 2010
Arty -

Your agent should be working on your behalf to obtain an extension of time.
With foreclosed property this is a wee bit more difficult then private sellers but make sure you have your agent request. Your options are extend, cancel prior to, risk your earnest money/deposit.

CJ
Web Reference:  http://www.TalkToCJ.com
0 votes
Bernard Gibb…, Agent, Danville, CA
Mon Aug 23, 2010
This is definitely a concern for you and you should discuss it with your agent. The normal procedure at this stage would be to request an extension of the contingency period.

Bernard Gibbons

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Bernard Gibbons, J. Rockcliff Realtors
DRE License # 01331583
Phone (925) 997-1585 - bernard@bernardgibbons.com

http://www.BernardGibbons.com
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