Edgewood, WA Real Estate Blog

I was recently reading an article in a local Seattle newspaper. I was a little surprised at the inaccuracy it contained. The question had to do with a neighborhood review contingency and referenced Northwest Multiple Listing Service purchase and sale agreement forms.

They had their facts wrong. It would have been helpful to talk with someone familiar with the forms referenced prior to their posting.

The NWMLS inspection addendum (35) has recently been changed (most recently 07/07). At one time there were two forms (35A & 35B) and they both included an optional provision for a neighborhood review. Now that provision has been moved to a separate addendum (NWMLS 35N).

However, the new consolidated inspection contingency form (35 rev 07/07) allows for the buyer to subjectively disapprove the inspection contingency for any reason whatsoever (without having to provide a reason).

Effectively, the inspection contingency could be disapproved because the buyer’s tea leaves didn’t align correctly – or they didn’t like the neighborhood.

All of the above notwithstanding, the question actually misses the point. A purchase and sale agreement is not just about price. It’s also an apportionment of risk. Adding contingencies shifts risk to the party they favor (you could have a seller contingency).

A buyer’s offer could include a contingency based upon anything, including winning the lottery or further contemplating the lint in their navel.

But why would a seller agree to take their property off the market unless the contingency was based upon something the seller could reasonably expect to be satisfied?

Seller’s usually consider a building inspection contingency reasonable because a buyer can’t ascertain the condition of a house without first paying a home inspector to crawl all over it. Furthermore, a proper inspection can’t be completed without the cooperation and consent of the seller.

As far as a contingency based upon a neighborhood review, most sellers would say to a buyer “go ahead and review the neighborhood. You and your agent can do that on your own.

When you’re satisfied with the neighborhood, I’d be happy to consider your offer. In the meantime, I’ll keep my options open and my property on the market. Someone who’s already done their homework may actually want to buy it, not just tie it up at no cost.”