Jeff’s Carlsbad Blog for First Time Home Buyers


Why is the Contingency Period Important?

Posted in Due Diligence,The purchase process by Jeff Dowler on February 28, 2009
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Views of Calavera Hills in east Carlsbad, a master planned community

Views of the master planned community of Calavera Hills in east Carlsbad

As a buyer of a condo or a detached home in California, the standard contract provides for a CONTINGENCY PERIOD during which you have the opportunity to perform your due diligence. The reason this is important is that you want to make sure you learn as much as you can about the property you are buying so you can make an informed decision.

The default time period is 17 days (starting the day after contract acceptance) but this can be negotiated up or down. Since buyers normally make their offers contingent on a number of things (e.g., inspection, bank appraisal, obtaining a loan commitment) the contingency period allows you to investigate the property and all available reports, and provides you with ample time to satisfy all the terms and conditions of your contingencies.

At the end of the contigency period you are required to either remove the contingencies and move ahead with the deal or withdraw. In this market some buyers wish to leave the loan contingecy in place until it is actually funded given the problems we have seen with some banks failing to fund at the last minute, this should be part of your negotiations up front. Failure to follow the terms and conditions of the written contract can put your deposit in jeopardy.

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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your home search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.

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All content copyright © 2009 Jeff Dowler

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