Contingencies are in place to protect the Buyer and they remain open until you remove the contingency IN WRITING by signing a contingency removal form. Each contingency (physical inspection, loan, appraisal and disclosures) has a time limit which is outlined in the purchase agreement. If the end of your contingency period comes and you haven’t either made a request or removed the contingency the Seller can send you a notice to perform which typically gives you 48 hours to take action (not including weekends). If you haven’t removed your contingency and the time expires the Seller can cancel the deal. You would get your 3% deposit back.
The appraisal contingency is in place mostly for the protection of the lender – they want to make sure you’re not agreeing to pay too much for a property they are going to lend on, and could end up with, if you default on your loan. The appraiser will come out to the property take pictures and measurements etc. The Buyer usually pays for this and it costs roughly $500 to $600. Buyers will often hold off on the appraisal until they’ve had at least the general inspection so they don’t spend that money on a house they decide not to purchase. When the escrow period is only 30 days you really need to get the appriasal done right away in order to move things along fast enough to meet that closing date.
Never remove a contingency until you are certain you are prepared to move forward. The loan and appraisal contingency should be removed only after your lender indicates you have full approval and it’s okay to remove those contingencies. Once you remove ALL CONTINGENCIES by signing the contingency removal form, you are committed to purchase the property. After all contingencies are removed in writing, if you don’t purchase the property (say you lose your job for example), chances are good you would forfeit your 3% deposit which would be released to the Seller.
Contact Kevin at (310) 200-4916 or email firstname.lastname@example.org