17-Days of Worry & Waiting

The 17-day contingency period is a very important protection for the buyer. Activities during this period may include obtaining a loan, reviewing disclosures, an appraisal, desired inspections and any other matters that may affect the purchase. Allowing the buyer this inspection period helps to insure that the buyer will be happy with his/her purchase and hopefully will not feel inclined to sue anyone after close of escrow.

During this 17-day period, the buyer has the right to cancel the contract and receive back the deposit. The contract does not require a reason to be given for the cancellation. In fact, it is probably best not to give a reason. You can simply use CAR's (California Association of REALTORS) Cancellation of Contract to cancel the agreement.

If the buyer fails to remove contingencies in writing, the seller may have the right to cancel. However, before cancelling, the seller must serve the buyer with CAR's Notice to Buyer to Perform up to two days before the 17-day contingency period ends.

Once the buyer has been served with this document, the buyer has 24 hours to remove contingencies, or the seller may cancel. Remember, though, that if the seller cancels the contract after serving the above document to the buyer, the agreement requires that the deposit go back to the buyer.

One common mistake made by sellers is when they are completing repairs requested by the buyer. Before agreeing to making repairs, it is best to require that the buyer remove any contingencies. Otherwise, the seller may make the repairs at great expense only to have the buyer cancel and then have the deposit returned to the buyer.

If you have any real estate questions or general questions about San Luis Obispo North County, please contact me via email, call me at (805) 235-0234 or visit my website for more information.