Seattle Housing Buzz

NOTE: Since this post was originally written, many of the forms have since been revised. The information contained below may no longer be accurate.

This Summer the NWMLS revised a number of the forms commonly used in the purchase and sale of residential property (single family homes, condos & townhomes). Listed below is a synopsis of those changes. Whether you’re a seller or a buyer, it’s important to understand how these changes can affect you. This article only highlights the changes and is not meant to convey & explain the complete set of revisions.

Seller Disclosure Statement (Form 17)
Revision of farming disclosure. In the previous update the form incorporated a question where the seller had to indicate whether there was a “farm” within a one mile radius of the property. There was ambiguity as to what consistuted a farm, thus potentially creating undue exposure on part of the seller. The current revision simply states that the property may lie in close proximity to a farm. It no longer requires to Seller to actively acknowledge the existence of a farm.

Residential Purchase & Sale Agreement (Form 21)

Possession Date:

• Eliminated a possession option on the contract allowing for possession to occur after closing. Contracts now default to possession at closing, though other alternatives may be agreed to. A possession date may fall on a weekend or holiday.

Computation of time:

• Clarifies that time is expressed in days, not hours. In respects to the contract, 24 hours does not equal 1 day. Time starts by counting the next day. Time periods end at 9:00PM unless otherwise specified.
• If a specific date is entered, that date will apply even if it’s a weekend or holiday.
• For time periods of 5 days or less, business days are counted. For more than 5 days, calendar days apply.
• If the last day falls on a weekend or holiday, it is not counted, except for the Possession Date.

Legal Description:

• A legal description must be attached as an Exhibit at the time of the offer for the contract to be valid. If not attached, the contract is considered illusory and not binding.

Assignment:

• The Purchase and Sale contract prohibits assignment to another party without written consent of the seller. However, at the time of offer, the parties may include “and/or assigns” on the first page of the agreement.

Financing Addendum (Form 22A)

• Buyers must disclose type of loan they are obtaining including whether the loan is a Second or Bridge.
• Clarifies that the downpayment is in addition to all sources of financing.
• The Contingency runs from Mutual Acceptance or Satisfaction of Form 22B.
• Buyer must either waive or provide a letter of loan commitment within 30 days; obligation to provide the letter is automatic. Unless waived, the Contingency remains active.
• If the Buyer does not provide the loan commitment letter, the Seller may provide a 3-day termination notice or allow the deal to continue.

Buyers Home Contigency Addendum (Form 22B)
The revisions clarify that:

• Sellers must accept the bump offer before giving the bump notice.
• Satisfaction is something much different than waiver and with different ramifications
• By waiving Form 22B, Buyer waives all other contingencies including Financing and Home Inspection

Inspection Addendum (Form 35)
Previously, the NWMLS supported two differently Home Inspection Addendums. The former Form 35A allowed for the Buyer to back out of the contract simply by disapproving the Inspection report. The former Form 35B allowed the Seller the opportunity to make repairs on items which the Buyer disapproved of. Both, Forms 35A and 35B, have been discontinued and replaced with Form 35.

• The new Form 35 closely resembles the former Form 35A, providing the Buyers the right of termination by disapproving, albeit subjectively, the Inspection report. This allows the buyer to essentially walk away from the deal.
• The Buyer has 10 days to inspect and may (1) approve and waive the contingency, (2) disapprove and terminate the contract, (3) request additional inspections or (4) propose modifications. If the Buyer does nothing, the contingency is automatically waived.
• Removed provisions for Deferred Deposit of Earnest Money and the Neighborhood Review (now separate form).