What Are Contingencies in Real Estate in Washington?
In Washington real estate, contingencies are contractual conditions that must be satisfied before a transaction can fully proceed to closing.
They protect buyers (and sometimes sellers) by allowing termination of the contract under specific circumstances — without losing earnest money — if deadlines and procedures are followed.
Contingencies are written directly into the Purchase and Sale Agreement and its addenda.
Why Contingencies Matter
When a home goes under contract, it is not automatically a guaranteed sale.
Until contingencies are:
- Satisfied
- Waived
- Or expired
The transaction is still conditional.
Contingencies define:
- What must happen
- By when
- And what rights each party has if something goes wrong
They are the legal safety nets of the contract.
Common Contingencies in Washington
1. Inspection Contingency (NWMLS Form 35)
Allows the buyer to:
- Inspect the property
- Request repairs
- Negotiate credits
- Or terminate the agreement
If the buyer follows the timeline, earnest money is protected.
2. Financing Contingency (NWMLS Form 22A)
Makes the purchase contingent on the buyer obtaining loan approval.
If financing fails within the contingency period, the buyer may terminate and recover earnest money.
3. Appraisal Contingency
Often part of the financing contingency.
If the home appraises below purchase price, the buyer may:
- Terminate
- Renegotiate
- Bring additional funds
Depending on how the contract is written.
4. Title Review Contingency
Allows the buyer to review the preliminary title report.
If there are unacceptable title conditions, the buyer may object.
5. Sale of Buyer’s Property Contingency (Form 22B or 22Q)
Makes the purchase contingent on the buyer selling their existing home.
This is less common in competitive markets but still used in certain situations.
6. HOA / Resale Certificate Review (Form 22D)
Allows buyers purchasing in an HOA to review the resale certificate and financial documents.
Buyers may have a statutory right to cancel within a specific timeframe.
How Contingencies Expire
In Washington, contracts include the phrase:
“Time Is of the Essence.”
That means deadlines are strict.
If a buyer does not:
- Deliver notice
- Respond properly
- Or terminate within the contingency period
The contingency may automatically expire.
Once expired, the protection is gone.
Are Contingencies Mandatory?
No.
Contingencies are optional and negotiable.
In competitive markets, buyers sometimes:
- Shorten contingency periods
- Modify protections
- Or waive contingencies entirely
Waiving contingencies increases risk.
What Happens After Contingencies Expire?
Once all contingencies are:
- Waived, or
- Expired
The transaction becomes much firmer.
At that point:
- Earnest money is less protected
- Seller confidence increases
- Cancellation becomes more difficult
This is often referred to as the deal “going hard.”
Bottom Line
Contingencies in Washington real estate are contractual protections that allow buyers to investigate, finance, and evaluate the property before becoming fully committed.
They define when a buyer can safely exit a contract — and when that protection expires.
Understanding contingency timelines is critical to protecting earnest money and avoiding costly mistakes.
FAQ
What is a contingency in Washington real estate?
A contingency is a contractual condition that allows a party to cancel the agreement under specific circumstances without penalty.
Are contingencies required in Washington?
No. They are optional and negotiated as part of the offer.
Can a buyer lose earnest money if they miss a contingency deadline?
Yes. If a contingency expires and the buyer cancels afterward, earnest money may be at risk.
What is the most common contingency?
The inspection contingency (NWMLS Form 35) is the most common.
What happens when all contingencies are removed?
The transaction becomes firm, and cancellation becomes much more difficult without financial consequences.