What to Do if Your Buyer Misses Their Contingency Removal Date
(Note to reader: This post is California specific. Florida and many other states do not require the buyer to submit a contingency removal form.) When you head into escrow, there are a few contingencies in place that help protect your buyer. It's up to your buyer to submit a contingency removal form once inspections are completed and they are confident that they want to move forward with their home purchase. Similar contingencies typically exist related to loan and appraisal.
But what happens if the contingency removal date you agreed to in the California residential purchase agreement passes and the buyer hasn't submitted their removal form yet? Read on to learn!
When the buyer doesn't remove contingencies by the contingency removal date, you have two options as the seller:
- Do nothing and see what happens;
- Serve a Notice to Perform.
This post explains in detail when to use the notice to perform and when not to use it. It can be a challenging decision for you as the seller because breaking escrow and starting over is not ideal. In these circumstances, you are often faced with two competing bad options.
If you provide us more details on your particular situation, we can advise as to what option we think is best for you.
Generally, we advise that you give the buyer a little bit of time, but don't let timelines extend indefinitely. The most common reason to give the buyer extra time is when the buyer is having struggles related to a loan. Delays related to loans are very common, and more often than not, the buyer ultimately closes.
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