Seattle Condo Authority • Jeff Reynolds • 20+ Years Experience
How to protect yourself in a competitive market without losing the deal.
Seattle Condo Authority • Buyer Education
A contingency is a condition written into a purchase and sale agreement that allows the buyer to exit the transaction -- and recover their earnest money -- if a specific condition is not met. Contingencies are buyer protections. They give you a defined exit right if something material turns out to be different from what you expected when you made your offer.
Seattle condo purchases typically involve three main contingencies: the financing contingency, the inspection contingency, and the HOA document review period. Understanding each one -- and knowing when they apply in a condo transaction -- is essential to protecting yourself without making your offer uncompetitive.
A financing contingency gives the buyer the right to exit the contract and recover their earnest money if they are unable to obtain financing on the terms specified in the contract (typically the purchase price, loan amount, and interest rate cap). For condo purchases, the financing contingency must also protect the buyer if the building itself fails to qualify for the chosen loan type -- a risk that does not exist in single-family transactions.
Jeff Reynolds specifically addresses building-level financing risk in offer language. A buyer who is perfectly qualified but loses financing because the building fails a warrantability review deserves the same exit protection as one whose personal financial picture changes. This detail is often overlooked in standard contract forms.
An inspection contingency gives the buyer the right to conduct a physical inspection of the unit and, in some cases, the building's common areas, and to exit the contract or renegotiate if the inspection reveals material issues. Condo inspections differ from single-family inspections -- the inspector focuses on the unit's interior systems and any unit-specific issues, while building envelope, roof, and structural items belong to the HOA.
For Seattle condo buyers, a unit inspection typically reveals plumbing, electrical, HVAC, appliance, and window conditions. It does not reveal HOA-managed building deficiencies unless the inspector happens to observe obvious common area problems. Building-level condition issues are better assessed through HOA meeting minutes and the reserve study than through a unit inspection alone.
The HOA document review period -- often called the resale certificate review period -- is a contingency specific to condo transactions. After receiving the resale certificate and related HOA documents, buyers have a defined window to review the materials and, if they find them unacceptable, rescind the contract under Washington State law. This is a uniquely powerful buyer protection that does not exist in single-family purchases.
The review period must be long enough to actually read and evaluate the documents -- reserve study, budget, meeting minutes, CC&Rs, and the resale certificate itself. Jeff Reynolds recommends a minimum of five business days and reads every document produced during this period.
In Seattle's competitive condo market, sellers sometimes prefer offers with fewer contingencies. Buyers may be tempted to waive contingencies to strengthen their offer. Jeff Reynolds does not recommend waiving the HOA document review period -- it is a statutory right in Washington and one of the strongest protections available in a condo transaction. The financing and inspection contingencies can sometimes be shortened, modified, or replaced with alternative protections without eliminating buyer rights entirely. The approach depends on specific property and market conditions.
Frequently Asked Questions
For most condo buyers, the HOA document review period (resale certificate contingency) is the most uniquely important protection. Unlike single-family purchases, Seattle condo buyers are buying into a financial and legal community -- the HOA -- whose condition they cannot assess without reviewing the resale certificate, reserve study, and meeting minutes. Jeff Reynolds preserves this review period in every offer he writes.
Buyers can waive contingencies, but this carries real risk. Waiving the inspection contingency means you accept the unit in whatever condition it is in. Waiving the financing contingency means you may lose your earnest money if financing falls through. Waiving the HOA document review eliminates your ability to rescind based on HOA conditions. Jeff Reynolds works with buyers to find ways to strengthen offers without unnecessarily exposing them to these risks.
The inspection period is negotiated between buyer and seller in the purchase and sale agreement. It typically ranges from five to ten business days in Seattle's condo market. A shorter inspection period can make an offer more attractive to sellers without eliminating your rights. Jeff Reynolds helps buyers determine the shortest inspection period that still gives adequate time to complete due diligence on a specific property.
If you exercise a contingency properly and within the specified timeframe, you are entitled to a full refund of your earnest money. If you attempt to exit a contract after a contingency has expired, you may forfeit your earnest money to the seller. Properly managing contingency deadlines is one of the most time-sensitive responsibilities in a real estate transaction -- Jeff Reynolds tracks every deadline for every buyer.
Yes. The inspection contingency covers the physical condition of the unit, while the HOA document review period specifically covers the HOA's resale certificate and financial documents. Washington State law provides a separate rescission right based on the resale certificate review. These are distinct protections that address different risks, and both are included in purchase agreements Jeff Reynolds writes for condo buyers.
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