Writing an offer in Sierra Madre? Your contingency plan can make or break the deal. You want protections that keep you safe, but you also want a strong offer that wins the home. In this guide, you’ll learn what each contingency does, common Southern California timelines, and how to tailor them to Sierra Madre’s hillside and older-home realities. Let’s dive in.
What contingencies do
A contingency is a clause in your purchase contract that sets a condition that must be met for the sale to move forward. If the condition is not met within the agreed time, you can usually cancel and recover your deposit. In California, most buyers and sellers use standard forms that outline contingency types and deadlines in days. Shorter or fewer contingencies can strengthen your offer, but they also increase your risk.
Core contingencies to know
Inspection contingency
An inspection contingency gives you time to inspect the property and decide whether to move forward, ask for repairs or a credit, or cancel. In Los Angeles County, this window is commonly 7 to 17 days after acceptance, though in hot markets some sellers push for 3 to 5 days or ask buyers to remove it. In Sierra Madre, focus on foundations, retaining walls, chimneys, plumbing and electrical in older homes, and any hillside or drainage issues.
Termite and WDO
A wood-destroying organism inspection checks for termites and related damage. It usually runs at the same time as your general inspection, often within that same 7 to 17 day period. Sellers often negotiate treatment or a credit for active infestations, while larger structural repairs depend on your agreement.
Loan financing contingency
This protects you if your lender cannot approve the loan on the terms in your offer. The timeline is commonly 17 to 21 days, and sometimes up to 30 days for complex loans. Shortening or removing this contingency raises your risk if underwriting or appraisal takes longer than expected.
Appraisal contingency
The appraisal contingency protects you if the appraisal comes in below the purchase price. It is often tied to the same 17 to 21 day period as the loan contingency. In multiple-offer situations, some sellers ask buyers to modify or remove it, or to cover an appraisal gap up to a set amount, which increases your cash exposure.
Title review contingency
This allows you to review the preliminary title report, easements, and any CC&Rs. Title review is commonly completed within 7 to 14 days. In older Sierra Madre pockets, pay attention to utility easements, access on hillside parcels, and any historic restrictions.
HOA document review
If you are buying a condo or a home in an HOA, you will review the rules, financials, and any special assessments. Buyers typically have 7 to 10 days after receiving the documents to decide whether to move forward. Sierra Madre is mostly single-family homes, but nearby condos and townhomes make this important when applicable.
Home sale contingency
This states that your purchase depends on selling your current home. It is less common in competitive areas because it adds uncertainty for the seller. If a seller accepts it, they may ask for proof of listing status, timelines, and the right to continue marketing the home.
Environmental and specialized checks
For pre-1978 homes, you may consider lead-based paint disclosures and inspections. In the foothills, you may also explore wildfire defensible space, ember-resistant details like vents and decks, and evaluations of slopes and retaining walls. These items are often folded into the inspection window or added as targeted contingencies with their own deadlines.
Local Sierra Madre factors
Sierra Madre sits at the base of the San Gabriel Mountains, and many homes are older or on hillside lots. That can mean unique structural considerations such as foundations, drainage, and retaining walls. Wildfire risk and seismic risk are regional realities, so examine ember exposure, vegetation clearance, and anchoring of older systems. Most homes connect to municipal sewer, but confirm the connection and consider a sewer lateral scope to assess condition.
Typical 30-day escrow timeline
- Day 0: Offer accepted, deposit delivered, escrow opens.
- Days 1 to 3: Order general, termite, and any specialty inspections; open title review.
- Days 3 to 10: Review inspection results; request repairs or a credit, or cancel within the set inspection period.
- Days 7 to 17: Lender advances underwriting; appraisal ordered and completed; title report reviewed.
- Days 17 to 21: Resolve appraisal and loan approval; remove loan-related contingencies when satisfied.
- Day 30: Close of escrow if all contingencies are removed and funds are ready.
Protect your deposit
Your initial deposit, often called earnest money, is held in escrow. If you cancel within active contingency periods based on a covered issue, the deposit is generally refundable under the contract. If you remove contingencies and later cannot close, your deposit can be at risk. Always remove contingencies in writing only when you are fully satisfied with inspections, valuation, and loan approval.
Offer strategies that balance risk
- Keep core protections. First-time buyers often keep inspection and loan contingencies, but set realistic, shorter timelines.
- Use strong financing. Provide a full pre-approval and work with a lender who can hit a 21 to 30 day escrow if needed.
- Consider targeted inspection focus. Limit repair requests to health, safety, or major systems to ease negotiations.
- Offer an appraisal gap amount. If you have the cash, state a cap on what you will cover if appraisal is short. Know your limits.
- Improve terms without losing protections. Propose a seller-preferred closing date, a short leaseback, or higher earnest money.
- Use conditional concessions. For example, agree to remove an inspection contingency if no material defects are found or if specific credits are provided.
Checklist for Sierra Madre buyers
Before you write an offer
- Get fully pre-approved and confirm appraisal and underwriting timelines with your lender.
- Talk with your agent about common local contingency lengths and competitive norms.
- Line up inspectors for general, WDO, roof, foundation, and slope/retaining-wall as needed.
In your contract
- State contingency deadlines in calendar days tied to escrow opening and receipt of documents.
- Define loan terms clearly, including type, rate cap, and down payment.
- Add targeted contingencies for hillside or older-home risks when warranted.
During the contingency period
- Review reports quickly and submit repair requests early.
- Coordinate appraisal timing with underwriting to meet the loan deadline.
- If appraisal is low, decide whether to bring cash, seek a price reduction, or cancel if covered.
Final steps
- Remove contingencies in writing only after you are satisfied.
- Keep copies of all inspections, repair agreements, and lender approvals in your escrow file.
When to shorten or remove contingencies
Shortening a contingency can make your offer more competitive without removing protections outright. For example, a 7-day inspection period can work if inspectors are ready and the property is accessible. Removing a contingency entirely increases your risk. If you consider it, be sure you understand potential costs, especially for structural, drainage, or wildfire-related issues common near the foothills.
Ready to tailor a contingency plan that fits your goals and the property you love? Start a clear, step-by-step strategy with David Magid.
FAQs
What is a purchase contingency in California?
- A contingency is a contract condition that must be met for the sale to move forward, giving you the right to cancel or renegotiate within set deadlines.
How long is the inspection period in Sierra Madre?
- In Los Angeles County, inspection windows are commonly 7 to 17 days, though hot markets can push for shorter periods like 3 to 5 days.
What does a loan contingency protect?
- It protects you if your lender cannot approve your loan on the agreed terms before the deadline, allowing you to cancel and recover your deposit.
What if the appraisal comes in low?
- You can bring extra cash to cover the gap, ask the seller to reduce the price, renegotiate terms, or cancel if you kept an appraisal contingency.
Do I need a termite inspection in Sierra Madre?
- Termite and WDO inspections are common and often run with the general inspection; active infestations are typically treated or credited by agreement.
Are HOA contingencies required for condos?
- Yes, you should review HOA documents, rules, budgets, and assessments, usually within 7 to 10 days after receiving the HOA package.
How is my deposit protected during escrow?
- Your earnest money is usually refundable if you cancel within active contingency periods for covered reasons; after removals, it can be at risk if you default.
