smilesue2005, Home Buyer in Sacramento, CA

sign a contingency removal form?

Asked by smilesue2005, Sacramento, CA Sat May 26, 2012

I am in the middle of a transaction. The seller's agent asked me sign the contingency removal form. He said unless I signed to remove all contengency, he won't start to repair. What is this about? If I sign this "remove all contengency" item, then he does not need to repair? Thanks.

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Max Boyko, Agent, Sacramento, CA
Sat May 26, 2012
The seller probably does not want to invest money into the property unless he knows for sure that you are buying it. Otherwise he may do the work and you can back out of it. Be sure to only sign it if you are 100% sure about the transaction, including the loan. Otherwise you can remove inspection contingencies but leave loan contingencies active.
1 vote
Laura Coffey, Agent, Santa Clarita, CA
Tue May 29, 2012
Per the California purchase agreement your contingency time frame is 17 days unless it was altered or countered out. With that being said if the seller has not provided you any of the disclosures or reports needed you can hold out on that contingency.
If the seller agreed to do repairs they have until the close of escrow to complete them. I can understand them wanting to know you are definitely going through with the transaction before wanting to complete the repairs. You need to make sure that you are completely satisfy all your contingencies before removing them.
The seller also has a right to issue you a notice to perform and can cancel the transaction if you to not perform per the contract. The repairs to the property are not a reason per the contract not to perform or close escrow because they are not completed.
If you feel your agent is not representing you correctly seek legal council.
0 votes
It really depends on the amount of stuff the buyer wants removed. That can really influence everything. See how much that is first, before making a decision.
Flag Tue Nov 18, 2014
Cindy Davis, Agent, San Diego, CA
Sun May 27, 2012
First of all, where's your buyer's agent in this situation? He or she is the person you need to ask because that person knows the details of your deal.

The contingency removal needs to be signed on whatever day that was agreed upon in the purchase contract. It is often 17 days from the start date. At that point, yes, you need to sign the contingency removal.

It is very common for sellers to hold off on any repairs until the contingency removal. They don't want to spend money untless they know the deal is going through.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Sun May 27, 2012
Dear SmileSue,

Goodness me!

I am hoping you do have a Buyer Agent working with you on this because you really need one!

Unfortunately we have no way of knowing the details on this transaction and as the saying's all in the "details"!
How sure are you that your loan will fund and when? How extensive are the repairs? What has the seller agreed to? What does your particular purchase contract say?

If you are not sure, and you do not in fact have a Buyer Agent, I would then advise you to hire an Attorney who specializes in Real Estate to advise you at this point.
0 votes
Lance King, Agent, San Francisco, CA
Sun May 27, 2012
It does make sense that a seller would want to know you are in the deal to close it before spending money. The best way to handle this in my view is that you release the contingency(s) (unless there are other issues) subject to the sellers making the necessary repairs by a certain date, which should be prior to close of escrow.

This way you are saying that you will close the deal (or at least remove your inspection contingencies) based upon the seller taking care of something, and if the seller doesn't then you still have grounds to back out if you want.
0 votes
Kylee Roe, Agent, Sacramento, CA
Sun May 27, 2012
Yep, speak with your Realtor. Max had a great suggestion to remove just your inspection contingencies. Depending on how your contract terms are written, your removal of inspection contingencies is just a way to say to the seller that you are still interested in purchasing the property, and if the seller will take the final steps, so will you. GOOD LUCK!
0 votes
Teri Andrews…, Agent, Auburn, CA
Sun May 27, 2012
They most likely want assurance that you are moving forward with the transaction before they spend the money on repairs. Your agent should be able to help you review the documents and explain why the seller is asking for contingency removal and verify that repairs will be done.
0 votes
Sue Archer R…, Agent, Palm Harbor, FL
Sun May 27, 2012
If you have received all assurances that the contingencies- home appraises, the home inspection identified no major flaws that would encourage you to cancel, you have received a loan approval, revewied all disclosures- are satisfied and you wish to continue with the purchase, you are obligated to remove contingencies. This happens about 17 days, as often written, to stay in compliance with your contract.

It sounds like your negotiation is requiring the seller to complete repairs. I would never have my seller invest in these repairs if a buyer has not demonstrated their intent to complete the contract, i.e. signing their release of contingencies.

It's just the way the contract works. This doesn't indicate any funny business.
0 votes
Michael Smith…, , Roseville, CA
Sat May 26, 2012
Look at page two of your contract under contingency removal under the normal 17 box (on top). Immediately below that there is another contingency that discusses "not removed until loan has funded" I believe, if my memory serves me. If that box is checked on the ratified contract, you do not need to sign a contingency removal.

Of course speak with your agent, assuming your agent is not also the seller's agent.
0 votes
Gina Borges-…, Agent, Sacramento, CA
Sat May 26, 2012
It is expected that a buyer will remove their contingencies, usually all, depending on how the purchase contracts reads. If you refer to the RPA 3(H) refers to loan terms and 14(B)1 for time periods it will tell you the number of days for your contingency period. It would be best for you to review your contract with your agent then determine if you should remove all contingencies. Once you do that your deposit is at risk. As for the repairs, that would be agreed to in writing, usually in an addendum or request for repair form. Again, I would suggest you have your Realtor review the contract and all related items before moving forward.
0 votes
Nancy Bergman, Agent, San Diego, CA
Sat May 26, 2012
I just had the same issue. I don't know what your contract says but sometimes it is a way of assuring the seller that you intend on purchasing the house.
Put yourself on the other side, the seller will do the requested repairs if they are sure you can get the loan. What if they spend all kinds of money getting the repairs that you wanted fixed then a few days before signing, you bail out of the deal? The seller has gone through all the trouble for you.
Remember, the sellers don't even have to do a request for repairs. The contract you sign in the state of CA is an AS-IS contract. In fact, many short sales and REO properties will not do any repairs. Do you have a problem about removing all contingencies? Are you concerned about your loan? You may want to consult your buyer's agent for advice regarding removing certain contingencies.

Nancy S Bergman
Realtor - LSSC
DRE # 01893550
Lyon RE Downtown
2801 J Street
Sacramento, CA 95816
Primary: 916-400-1355
0 votes
Ute Ferdig -…, Agent, New Castle, DE
Sat May 26, 2012
Your contingency removal does not relieve the seller of his/her responsibility to make agreed upon repairs. Essentially, the seller does not have to agree to make repairs and would not want to make even agreed upon repairs without an assurance that the transaction will close. As long as you have not removed your contingencies, you are still free to cancel the agreement and get your deposit back. If you are concerned about the seller not making the promised repairs, this should be addressed in an addendum to the contract. For instance, you could agree that money be held in escrow until the repairs are completed, which would mean that the seller does not get all his/her money until the repairs are completed. This will only work if the repairs don't have to be completed as a condition of the loan that you may be getting to finance the purchase. If the repairs are a condition of the loan, then you could remove your loan contingency with the exception of repair related loan conditions. The repair addendum should state a deadline by which the repairs need to be completed and your final walk-through should be after that deadline. The purpose of the final walk-through is to check whether agreed repairs have been completed and whether the property is in substantially the same condition it was when you made the offer (aside from the items that were repaired).

Just out of curiosity. Do you have your own buyer's agent? From the way your question reads, it sounds like the listing agent is also your agent since you said that the seller's agent asked you to sign the contingency removal form. If you had your own agent, the listing agent would not be speaking to you directly about this. If you do have your own agent, you should discuss your concerns with your agent. If you do not have your own agent, you may want to consult with an attorney to make sure your rights are adequately protected under the purchase agreement.
0 votes
Patric Carpe…, Agent, Sacramento, CA
Sat May 26, 2012
No. A seller is obligated to perform the repairs once they sign that form. HOWEVER, in order to comply, they only need to make the repairs prior to the close of escrow. If you back out without removing contingencies, you are likely walking away with all of your deposit money, while they are out the cost of any repairs performed that YOU requested (another buyer may not have asked for THOSE repairs). Think of it as the Seller asking you to put some skin in the game. I advise my sellers to delay all repairs until Contingencies are removed and/or when doc's get to title -- at that point, both sides are pretty confident that the deal will get done and should have no issue doing what is needed to get over the final hurdle.
0 votes
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