We read an interesting article in Washington REALTOR News, called "Mythbusters: Debunking industry legends and fairy tales." Myth Number 4 is shown below in its entirety, and is reprinted with permission from the Washington Association of REALTORS. This article is not legal advice. You should always consult your own real estate attorney, REALTOR or tax specialist.
Myth Number 4: The buyer's financing contingency expired.
The truth is, using the statewide financing contingency, form 22A, the buyer’s financing contingency never, never, never expires. The only way the seller can make the financing contingency go away prior to closing is for seller to force buyer to waive the financing contingency. After the number of days established in paragraph 2 of the contingency addendum elapse, seller can give buyer a “notice of termination” (form 22AR). If seller never gives that notice of termination, buyer’s financing contingency never expires. If seller gives the notice of termination, buyer has three days to either waive the financing contingency and proceed to closing or allow the purchase agreement to terminate and recover buyer’s earnest money. Seller can give the notice of termination any time after the number of days specified in paragraph 2 elapse, regardless of whether buyer provides the required letter of loan commitment and notwithstanding the quality of buyer’s letter of loan commitment. But, if seller never forces buyer to waive the financing contingency, then the financing contingency will be in place, protecting buyer, even at the closing table.
Keep the above in mind as your sale goes through the closing process. For more myths and realities about the homeselling process, see our Real Estate Mumbo Jumbo page.
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