Most every purchase of real property begins with certain contingencies. Typical contingencies are the approval of a preliminary title report, the approval of a physical inspection and the approval for obtaining financing. It is by mutual agreement how many days each contingency will run for and from what date the time period begins. Generally, the time periods begin from Buyer's and Seller's signed mutual agreement on the purchase contract. Sometimes the time periods begin from the date that escrow is opened. Other times the time periods commence from signed escrow instructions being returned to escrow by all parties. Generally, approval of the preliminary title report and the covenants, conditions, and restrictions run from 3 to 10 days from Buyer's receipt of same. The physical inspection and geological inspection generally run 7 to 14 calendar days and 10 to 21 calendar days respectively. The loan contingency generally averages 20 to 30 calendar days.

Beware of unreasonable time periods and unreasonable contingencies. If you choose to accommodate unusual contingencies, be sure to keep your time periods short and leave yourself a way out. Remember you can not unilaterally cancel an escrow without signed cancellation instructions by all parties.

Other contingencies might be the approval of architectural plans, lot line modifications, the elimination of an easement, the modification of covenants, conditions and restrictions, the approval of construction financing, the approval of the city to modify existing plans, the obtaining of permits for a previously constructed addition, the closing of another escrow, the closing of an estate, a condominium subdivision proposal, an attorney's approval or business manager's approval, etc.

The important thing is to analyze the sincerity of the Buyer. Correctly assess that the contingency being requested has not been designed as a stall tactic. To eliminate a one-sided contract, be sure to keep time periods short and leave yourself a way out. Also, remember that when waiting for the City, the County, or any governmental agency, time is out of everyone's hands and just because a time period is incorporated in the contract, there is no guarantee that time periods can be met. Keep that in mind prior to entering into any such commitments.

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~~ This article was written by Ron Wynn - 8/2000 ~~