should I remove contingency?

Asked by Wei-min Chang, 90034 Wed Jul 28, 2010

In the agreement, seller is agreed to take care of termite inspection and anything in the section 1 in the report. And he is supposed to give us, the buyer, termite report within 7 days after the offer is accepted. However, now he can only arrange the inspection no sooner than 5 days after 17 day contingency period. So should we remove contingency? After the contingency period, how can we protect our right of cancellation and take back our earnest money?

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12
Deborah Brem…, Agent, Los Angeles, CA
Wed Jul 28, 2010
BEST ANSWER
If you were my client, and given the circumstances as described above, I would suggest the following:
Do not remove your contingency until you have received all documentation relating to the termite inspection, have read it, and approve of it. The seller has not complied with his agreed-upon timelines; therefore, you cannot be expected to remove termite as a contingency.
Look at paragraph 14.A of the purchase agreement. It notes that you may give a notice to perform to the seller if they have not provided the report within the time specified. I would suggest you consider that to protect your rights. Consult your agent to discuss all of your options under the terms of your contract.
Best,
Deborah Bremner
REALTOR, 00588885
ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) 818.564.6591
http://www.thebremnergroup.com/news/
0 votes
Sylvia Barry,…, Agent, Marin, CA
Fri Jul 30, 2010
CA standard purchase contract allows you to have at least five days to review any report from the seller which has 'material' effect on the purchase of the home. Inspection reports are certainly reports that fit into the category. If the seller provides those reports to you on day 16th, you will then have another 4 days after the 17 days inspection period to read, review and conduct additional inspection if required from reading the inspection reports provided by the seller. Five days is usually enough to determine whether you want to go forward, ask for credit or get out of purcahse.

But don't remove inspection contingency until you have reviewed all reports.

Sylvia Chang Barry
Marin County Realtor .
Web Reference:  http://www.SylviaBarryRE.com
1 vote
Marilyn Jenne, Agent, Los Angeles, CA
Wed Jul 28, 2010
This, combined with your earlier question re holding title, makes me ask, "is it worth the hassle, and risk, to not use a capable agent?" And/or are you using an agent at all? It's one thing to verify advice, but did you take on too much when trying to "do it yourself?" If there is an agent representing you, you may want to go to the broker supervising them to get more comprehensive answers.
1 vote
Sandy Carroll, Agent, Seal Beach, CA
Sun Aug 1, 2010
There is a form, Demand for Seller to Perform. It spells it out, your agent checks the boxes for what is needed. Also get another form ETA, extension of time. Your agent can fill in the blanks to exactly what you need, just for the termite inspection.

California Association of Realtors has all the forms online for all the agents. There is a form for everything that very specifically spells out everything. It is very helpful to use them. The demand to perform, gives two days, then you have the option to cancel. It is only an option. It will scare the other party into action.

Good luck, tell us what happened.

Sandy
0 votes
Jonathan Chi, Agent, Rancho Cucamonga, CA
Thu Jul 29, 2010
You can remove all contingencies other than inspection contingency if the appraisal and disclosures are all going through. At the same time, request an extension stating that termite has not be approved by the buyer. This happens very often in this market right now because things always come up during the transaction. Or, simply find another termite company. There are a lot of good termite companies out there and they usually come out the next day for inspection.
0 votes
Wei-min Chang, Home Buyer, 90034
Wed Jul 28, 2010
Thank you, all! Appreciate your advices. I already told my agent we need the seller to extend the inspection contingency. And per your suggestions, I will not remove the contingency until I do review it for sure.
btw, I do have an agent who is a nice person I think. But I don't think my agent is experienced enough and also a good negotiator.
0 votes
April Tavares, Agent, Campbell, CA
Wed Jul 28, 2010
As noted below, you should request an inspection contingency extension to make things crystal clear.
That being said, keep in mind, that the CAR Residential Purchase Agreement in paragraph 14B(3) also states:
"However, if any report, disclosure or information for which Seller is responsible is not Delivered within the time specified in 14A, then the Buyer has 5 (or XX) Days after Delivery of any such items, or the time specified in 14B(1), whichever is later to Deliver to Seller a removal of the applicable contingency or cancellation of this Agreement."
Take a second look at your contract to verify if something beyond the standard 5 days was written into your contract.

Best of luck with your transaction,
April Tavares, GRI
REALTOR, DRE License #01742179
Web Reference:  http://www.AprilTavares.com
0 votes
Thomas Bayles, , West Hollywood, CA
Wed Jul 28, 2010
Other than your loan & appraisal contingency, your inspection contingency is the only protection/right of cancellation you have. I would not remove your contingencies until you have the loan approval/commitment letter from the bank (along witht the appraisal) & until you have conducted all your inspections & completed your due diligence.
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Jul 28, 2010
You should extend the contingincy until you receive everything you are do. Dont sign off on anything that you havent received, if you release it, you give up your rights to ask fro a release based on an unsatisfactory result.
Web Reference:  http://wwwScottSellsNH.com
0 votes
CJ Brasiel, Agent, San Jose, CA
Wed Jul 28, 2010
Wei -

Extend the contingency to an appropriate date after the inspection report is received to provide you with time to review and ask questions, get further estimates for repairs etc. Your agent can help you negotiate these items best.

CJ
Web Reference:  http://www.TalkToCJ.com
0 votes
Fred Glick, Agent, Mountain View, CA
Wed Jul 28, 2010
Talk with your agent, but I say don't remove the contingency. Make sure that the Seller does what they said they would do and get it in writing including the dates!

Good luck.

Fred
Web Reference:  http://fglick.com
0 votes
Jane Peters, Agent, Los Angeles, CA
Wed Jul 28, 2010
Firstly, these are questions your agent should be answering. And you most certainly don't remove any contingencies until you have the termite report. You are under no obligation to remove your contingencies until the seller has met theirs.
Web Reference:  http://www.homejane.com
0 votes
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